Wall Street experienced its steepest decline since July as rising inflation data spooked investors, particularly in technology and AI infrastructure sectors. The S&P 500 dropped 1.1%, the Nasdaq Composite fell 1.9%, and the Dow Jones Industrial Average declined 0.1%. Major tech companies such as CoreWeave, Nebius, and Oracle saw significant losses, with CoreWeave plummeting 16% and Nebius falling 11%. Among 23 AI infrastructure stocks tracked by PRISM’s AI Data Center and Infrastructure Index, 21 declined, averaging a loss of 7.46%.
The selloff extended to Bitcoin miners, several of which have diversified into AI infrastructure. TeraWulf led the declines with a 12.64% drop, followed closely by Core Scientific, Cipher Mining, and IREN, which fell 12.44%, 12.35%, and 12.2%, respectively. Other affected miners included Riot Platforms, Bitdeer Technologies, MARA, and CleanSpark.
Higher interest rates could increase borrowing costs for AI infrastructure companies, many of which rely on debt to fund data center expansions. The inflation report, showing a 3.7% rise in US consumer prices in September, exceeded economists’ expectations of 3.6% and the Fed’s 2% target. This triggered increased speculation of an October Federal Reserve interest-rate hike, with probabilities briefly exceeding 50% before easing.
San Francisco Federal Reserve President Mary Daly offered a cautious perspective, stating that while further rate hikes may be necessary to control inflation, there was no urgency to act immediately. She emphasized the importance of making decisions with sufficient information rather than rushing based on limited data.