New cracks in the AI trade push Wall Street to its worst week since June

what happened

According to The Wall Street Journal (via ru.tradingview.com), the week was the market's worst since June. The Nasdaq composite dropped 4.5% on Friday, and the PHLX semiconductor index fell 3.8%, its longest losing streak since 2008. CoreWeave shares lost 25% over the week, and Dell Technologies slid 22%, its worst weekly performance on record.

Investors worry that higher U.S. borrowing costs could slow the large investments in AI infrastructure that have been a key driver of economic growth. The 10-year Treasury yield fell 0.146 percentage point to 5.097% as money moved back into government bonds. Rate futures still price roughly an 85% chance the Fed raises rates by year-end.

why it matters

Markets are watching the link between bond yields, tech stock valuations and Fed rate expectations. Hot inflation data reinforced bets on further hikes, while debt stress at data-center companies highlights the vulnerability of the most indebted AI players.

market impact

US tech and chip stocks: higher borrowing costs and rate hike bets weigh on AI shares and data-center bonds

tags

instruments