US stocks: Nasdaq slides toward one-month low as AI selloff deepens, inflation pressures build

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US market edges lower as rate pressure hammers high-flying AI stocks.

Meanwhile, the Dow Jones Industrial Average rises 163.58 points, or 0.32%, to 51,785.06. The S&P 500 falls 32.20 points, or 0.42%, to 7,686.74, while the Nasdaq Composite loses 283.07 points, or 1.06%, to 26,409.80.

The S&P 500 and Nasdaq recorded their biggest one-day declines since July on Wednesday after hotter-than-expected consumer inflation data strengthened expectations of further Federal Reserve rate hikes and hit technology shares.

Sentiment weakens further after TSMC strikes a cautious tone on its 2027 outlook, citing macroeconomic uncertainty. A reported 45% quarter-on-quarter increase in third-quarter revenue at AI company Anthropic fails to reassure investors.

CoreWeave, the heavily indebted data-centre operator at the centre of the recent selloff, tumbles 8.5% after dropping 15% on Wednesday. Oracle edges lower following a nearly 9% decline in the previous session. Bonds issued by both companies also fall, pushing their yields to record highs.

Chipmakers extend their losses. Nvidia drops 3.3%, Micron Technology falls 5% and Advanced Micro Devices slides 6.4%.

If the losses hold, the broader semiconductor index will have erased about $2 trillion in market value during a decline of more than 14% over seven sessions. That would mark its longest losing streak since May 2025.

Information technology is the S&P 500’s worst-performing sector, falling 2%. The selloff drives demand for government bonds, pushing the benchmark 10-year US Treasury yield to 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, says in a note, according to the Reuters report.

“The repricing of CoreWeave’s debt suggests that investors are becoming less willing to finance AI infrastructure growth at any cost.

The CBOE Volatility Index, Wall Street’s fear gauge, touches a two-week high and is last up 0.83 points at 17.74.

Investors rotate into traditionally defensive sectors, with healthcare and consumer staples rising more than 2% each. Gains in those sectors help support the Dow.

The Nasdaq has fallen more than 4% from the record high it reached last week. Concerns about borrowing costs and AI spending threaten to overshadow the third-quarter earnings season, during which S&P 500 profits are expected to grow 30.6%, according to LSEG data.

US producer prices record their biggest increase in 4½ years in September as the cost of goods and services rises, offering further evidence that inflation is spreading beyond energy.

Investors now await Federal Reserve Chair Kevin Warsh’s speech at the International Monetary Fund’s annual meeting.

Among individual stocks, Rocket Lab plunges 15% after delaying the first launch of its larger Neutron rocket until next year.

FMC sinks more than 38% after the agricultural-chemicals company sharply lowers its third-quarter outlook and estimates a $625 million-$675 million impact from commercial actions.

Advancing stocks outnumber declining issues by 1.78 to 1 on the New York Stock Exchange and by 1.05 to 1 on the Nasdaq.

The S&P 500 posts 20 new 52-week highs and no new lows, while the Nasdaq Composite records 29 new highs and 261 new lows.