AI Stocks Slide as Inflation Data Revives Rate Hike Fears

Wall Street futures pointed lower Thursday as concerns over artificial intelligence spending collided with fresh signs of persistent inflation. S&P 500 futures fell 0.2 percent while Nasdaq-100 contracts dropped 1.1 percent in early trading, extending a slide that began the previous session when the tech-heavy Nasdaq Composite posted its largest single-day decline since July. The Dow Jones Industrial Average futures, by contrast, rose modestly.

The pullback centered on companies tied to the AI supply chain. Shares of CoreWeave fell another 5 percent after tumbling more than 15 percent Wednesday amid worries the cloud-computing firm is taking on excessive debt to fund its expansion. Micron Technology and Advanced Micro Devices each dropped around 4 percent in premarket trading. Memory-chip makers fared worse overseas: South Korea’s Kospi index sank more than 8 percent overnight, triggering trading halts, while SK Hynix and Samsung Electronics shares fell sharply. Japan’s Nikkei 225 declined nearly 5 percent.

Those moves followed the release of September consumer-price data showing inflation rising to 3.7 percent, above expectations and marking the fastest pace since May. Traders immediately adjusted bets on Federal Reserve policy, with some now pricing in the possibility of another rate increase before year-end. Analysts at Deutsche Bank described the past 24 hours as an unusually volatile stretch in which stronger-than-expected inflation figures amplified existing doubts about whether AI revenue growth can justify current valuations and capital outlays.

Not every corner of the market shared the pessimism. Walmart shares climbed 3 percent and Merck rose more than 1 percent, illustrating that investors continued to favor companies less exposed to the AI trade. Yet the breadth of losses in semiconductor and data-center names underscored how heavily recent gains have rested on a narrow set of technology bets.

Against that backdrop, Taiwan Semiconductor Manufacturing Co reported record quarterly results that underscored the underlying demand driving the sector. The contract chipmaker posted net income of NT$763.1 billion, exceeding estimates, and raised its full-year revenue outlook. TSMC also signaled that capital spending through 2028 would exceed prior plans as it builds capacity for advanced AI chips. The contrast between the company’s operating performance and the market’s reaction to leverage concerns elsewhere highlighted the uneven distribution of returns within the AI ecosystem.

Policy questions loom over the volatility. An analysis of recent financial disclosures found that at least 106 members of Congress or their immediate family members hold investments in AI developers, chipmakers, cloud providers or data-center firms, with total holdings valued between roughly $83 million and $325 million. Six large technology companies account for more than half of the disclosed value. Congress has yet to enact comprehensive AI legislation despite repeated warnings from researchers and former officials about safety, labor-market and competitive risks.

The combination of rapid capital deployment, concentrated ownership and delayed regulatory oversight has created conditions in which sentiment can shift quickly when macroeconomic data or individual-company leverage metrics move against the prevailing narrative. Thursday’s trading suggested that investors remain sensitive to any signal that the cost of sustaining the current pace of AI investment may be rising.