By Sruthi Shankar and Purvi Agarwal
Oct 15 (Reuters) - The Nasdaq fell to near one-month lows on Thursday, weighed by a worsening selloff in AI-linked stocks on fears rising interest rates could impact artificial-intelligence investments, and fresh data pointing to building US price pressures.
The S&P 500 and the Nasdaq marked their biggest one-day fall since July on Wednesday after hotter-than-expected consumer inflation data fueled expectations of further interest-rate hikes from the US Federal Reserve,
dragging on tech stocks.
Semiconductor maker TSMC's <2330.TW> cautious note for 2027, citing macroeconomic uncertainties, also dented sentiment.
Reports that AI lab Anthropic's third-quarter revenue surged 45% compared to the previous quarter failed to lift investor spirits.
Heavily indebted data-center operator CoreWeave, sitting in the eye of the recent tech storm, lost 8.5% following a 15% drop on Wednesday, while cloud computing giant Oracle was down marginally after a nearly 9% fall in the previous session. The companies' bonds also fell, pushing their yields to record highs.
Chipmakers lost ground, with Nvidia down 3.3%, and Micron Technology and Advanced Micro Devices losing 5% and 6.4%, respectively.
The broader chips index will have shed $2 trillion in a more-than-14% slide in seven sessions, if losses hold. It would mark its longest losing streak since May 2025.
The S&P 500 information technology sector was the biggest drag, down 2%. The slump pushed investors to government bonds, with the benchmark 10-year US Treasury yield at a three-week low of 5.0725%.
"Investors are increasingly questioning how much future growth is already priced into valuations, how expansion is being financed and when these investments will generate sufficient returns," Charu Chanana, chief investment strategist at Saxo, said in a note.
"The repricing of CoreWeave's debt suggests that investors are becoming less willing to finance AI infrastructure growth at any cost."
At 09:50 a.m. ET, the Dow Jones Industrial Average rose 163.58 points, or 0.32%, to 51,785.06, the S&P 500 shed 32.20 points, or 0.42%, to 7,686.74, and the Nasdaq Composite lost 283.07 points, or 1.06%, to 26,409.80.
The CBOE Volatility Index, known as Wall Street's fear gauge, hit a two-week high and was last up 0.83 points at 17.74.
Investors continued to segue into traditionally defensive sectors, with healthcare and consumer staples rising more than 2% each. Gains in these stocks propped up the Dow.
The Nasdaq has dropped more than 4% from record highs touched last week, with concerns about higher borrowing costs and AI spending threatening to eclipse the third-quarter earnings season, when S&P 500 profits are expected to grow 30.6%, according to LSEG data.
Data showed US producer prices increased by the most in 4-1/2 years in September amid rising goods and services costs, the latest indication of inflation broadening out beyond energy products.
Markets will now scrutinize Fed Chair Kevin Warsh's speech before the International Monetary Fund Annual Meeting.
Shares of Rocket Lab dropped 15% after the space company said the inaugural launch of its new, larger Neutron rocket was delayed until next year.
FMC slid over 38% after the agrichemicals company sharply cut its third-quarter outlook, which includes a $625 million-$675 million hit from commercial actions.
Advancing issues outnumbered decliners by a 1.78-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
The S&P 500 posted 20 new 52-week highs and no new lows, while the Nasdaq Composite recorded 29 new highs and 261 new lows.
(Reporting by Sruthi Shankar and Purvi Agarwal in Bengaluru; Editing by Rashmi Aich and Pooja Desai)
