Financial markets collapsed Friday as investors dumped technology stocks amid fears that companies exposed to artificial intelligence would begin to falter.
The tech-heavy Nasdaq Composite index fell 573 points, or 2.1%, to finish at 26,140, capping its worst week since June. The broader S&P 500 and the blue-chip Dow Industrial Average fell 1.1% and 0.3%, respectively.
Chipmakers and other technology companies have been under pressure this week as investors worry about heavy borrowing associated with the emergence of AI and the rapid construction of thousands of data centers needed to provide the computing power for AI models.
So-called neocloud companies like CoreWeave, which provide the raw computing power that AI models need to run, have been particularly hard hit. That’s because they’re financing much of their capital spending through debt and equity issuance rather than cash flow, raising concerns among investors about growing leverage, market analyst Adam Crisafulli, head of Vital Knowledge, told CBS News.
CoreWeave shares fell nearly 12% on Friday and about 24% this week as investors nervously watch its debt rise. Micron Technology fell 5.6%, Advanced Micro Devices fell 6%, Broadcom fell 4.5% and Intel fell 5.8%.
Elsewhere on Wall Street, Tesla shares fell 2.1% after the electric vehicle maker unveiled a new Roadster sports car who seems capable of projecting himself into the air.
Friday’s slowdown came amid concerns over whether AI company Anthropic, which is expected to go public soon, will be able to maintain its revenue momentum, Crisafulli said in a note to investors. Anthropogenic investors now plan to value the company at $1.5 trillion, down from the initial target of $2 trillion, Reuters reported on Thursday.
Inflation is moving in the wrong direction
Investors were also rattled this week by new signs that US inflation rises and move further away from the Federal Reserve’s 2% annual target.
Yields on the 10-year U.S. Treasury note — a key benchmark for mortgages, credit cards and other loans — remained steady at 5.1% on Friday. Earlier this month, bond yields jumped to their highest level in more than two decades, amid concerns about inflation and rising U.S. public debt.
High inflation figures this week could prompt the Federal Reserve to raise interest rates at its next meeting on October 28-29, according to some economists. For now, most Wall Street traders expect the central bank to keep its short-term rate unchanged, but the odds of a rate hike at the Fed’s December meeting jumped to 74.3% from 50.2% a month ago, according to CME FedWatch, which tracks Fed funds futures prices.
Fed Chairman Kevin Warsh gave no indication on possible changes to interest rate policy as he attended a meeting of financial leaders in Bangkok on Friday. The Fed increased rates at its last meeting in September, raising the federal funds rate to between 3.75% and 4%, its highest level since December 2025.
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