AI Stocks Drop After Hot Inflation Report Fuels Bets for Rate Hikes
Dell fell 11% and Oracle dropped 9% as Barclays cut ratings on several hardware names and investors worried about debt-fueled AI spending.
- Technology stocks dropped on Wednesday following a hotter-than-expected inflation report, with the S&P 500 falling 1.11% and the Nasdaq Composite falling 1.88%, marking their worst day since July.
- Rising inflation and bond yields have increased borrowing costs for the capital-intensive AI sector, bolstering the case for the Federal Reserve to raise interest rates to combat price pressures.
- Declines erased $80 billion in market value, with data center operator CoreWeave plunging 15.5% on Wednesday as its bond yields reached 15%; Dell Technologies fell 11% and Oracle dropped 9%.
- Jed Ellerbroek, portfolio manager at Argent Capital Management, noted that while major hyperscalers remain profitable, investors are increasingly skeptical about the AI buildout, with analysts warning expectations are "priced to perfection."
- Chinese semiconductor company CXMT announced progress on advanced memory chips, stoking competition concerns for US and South Korean manufacturers already struggling with high interest rates and elevated borrowing costs.
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(Seoul = Yonhap News) Reporter Jung Joo-ho = The stock price and corporate bond prices of U.S. artificial intelligence (AI) cloud company Coreweave plummeted together.
Nasdaq suffers biggest daily drop since July as inflation heats up | Honolulu Star-Advertiser
Hotter-than-expected inflation data sent the Nasdaq to a sharply lower close today, with worries about more interest rate hikes from the Federal Reserve pummeling shares of Oracle, CoreWeave and other AI stocks sensitive to higher borrowing costs.
US consumer prices are growing, even more so than predicted. Wall Street's concern for an early rise in interest rates is growing. The prospect of rising credit costs is especially not good for AI values.
The New York Stock Exchange closed lower as concerns about the path of inflation in the US and the cost of developing artificial intelligence resurfaced. The Dow Jones industrial average closed down 48.62 points (-0.09%) to 51,621.48. The Nasdaq, dominated by technology stocks, closed down 511.51 points (-1.88%) to 26,692.86. The broader S&P 500 index, indicative of the general trend, closed down 86.51 points (-1.11%) to 7,718.94. Read more at i…
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Nasdaq Drops Nearly 2% as Surging Inflation Sparks Fed Rate Hike Fears
Wall Street stocks fell sharply Wednesday after stronger-than-expected inflation data raised concerns about additional Federal Reserve interest rate hikes, triggering heavy losses in artificial intelligence ... The post Nasdaq Drops Nearly 2% as Surging Inflation Sparks Fed Rate Hike Fears first appeared on [your]NEWS.
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