Dow jumps 556 points as investors rotate from AI stocks to defensive sectors

US stocks closed mostly higher Thursday as investors shifted from AI-linked shares into defensive sectors like healthcare and consumer goods amid inflation and high financing cost concerns. The Dow Jones Industrial Average rose 556 points, or 1.08%, while the S&P 500 gained 0.33% and the Nasdaq Composite edged up 0.08%. September producer price data showed the strongest annual wholesale inflation increase since December 2022, following hotter-than-expected consumer price figures, raising fears the Federal Reserve could hike rates again before year-end. Healthcare and consumer companies like Eli Lilly, UnitedHealth, and Walmart gained on upgrades, while semiconductor stocks fell for a seventh straight session. Traders priced a 67% chance of a December rate hike, up from 62% Wednesday. The S&P 500 remains about 13% higher in 2026 after hitting a record last week, though valuations have cooled to their lowest since 2023.