AI Stocks Slide as S&P 500 and Nasdaq Open Lower on Debt Worries

what happened

S&P 500 and Nasdaq 100 futures were lower on Thursday morning as the selloff in artificial-intelligence stocks continued. Investors worry that higher interest rates could hurt spending on AI infrastructure. The indexes posted their steepest one-day decline since July after hotter-than-expected inflation data raised expectations of more rate hikes from the Federal Reserve.

The Producer Price Index rose 6.3% through September, above the 5.3% economists had forecast. Retail sales also beat expectations last month, growing more than 0.3%. TSMC warned of a cautious outlook for 2027 despite posting its sixth consecutive record quarterly profit. CoreWeave, a heavily indebted data-center operator, fell 15% on Wednesday and another 3.2% in premarket trading. Corporate bonds also weakened, pushing yields to record highs. Oracle shares dropped 1.6%.

The 10-year US Treasury yield fell to a three-week low of 5.0725% as investors moved from equities into government bonds. Nvidia lost 1.7%, while Micron and AMD fell 4.3% and 3.1%. The chip index has shed $1.64 trillion over six sessions, its longest losing streak since May 2025. Rocket Lab shares dropped 10.4% after its new Neutron rocket's debut launch was pushed to next year, and FMC plunged 42% after sharply cutting its third-quarter outlook.

why it matters

Two factors matter most for markets right now: expectations of further rate increases and questions about how AI infrastructure will be financed. While debt loads at companies such as CoreWeave keep rising and borrowing costs stay high, risks for the tech sector remain elevated. Fed Chair Kevin Warsh's speech ahead of the IMF Annual Meeting is a key event for investors this week.

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