The S&P 500 and Nasdaq Composite fell Thursday as concerns around tech companies overspending on artificial intelligence grew, and traders digested U.S. data that pointed to persistent inflation.
The broad market index shed 0.5%, while the tech-heavy Nasdaq dropped 1.32%. The Dow Jones Industrial Average outperformed, adding 269 points, or 0.5%.
CoreWeave shares dropped 3%, putting the neocloud name on pace to build on Wednesday’s losses. The stock tumbled more than 15% in the previous session as investors grew fearful that the company was borrowing too much for its AI build-out. CoreWeave corporate bond yields also surged.
Micron Technology and Advanced Micro Devices led the charge lower, shedding 4% and 3%, respectively. Others like Sandisk fell 5%, while U.S.-listed shares of Sk Hynix dropped 6%. Overnight, South Korea’s Kospi index fell more than 7%.
However, the market was supported by gains in areas outside of tech. Shares of retailer Walmart climbed almost 3%, while pharmaceutical giant Merck rose more than 1%.
Investors also reacted to more insights on the inflation front. The September reading on producer prices recorded an increase of 1.3% on the month and 6.3% year over year — the biggest monthly and yearly gains since 2022. The figures were above the 0.6% and 5.5% that economists polled by Dow Jones expected.
Concerns that the Federal Reserve could tighten monetary policy more aggressively before year-end weighed on equities Wednesday after new data showed consumer prices in September rose faster than expected on a year-over-year basis.
“Today’s PPI report, after Wednesday’s CPI, confirms inflation is getting worse as energy prices stay high,” said David Russell, global head of market strategy at TradeStation. “Election or no election, prices are rising and the Fed might be forced to act.”
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