- US stocks fell sharply Wednesday after September CPI rose 3.7%, above forecasts and the Fed’s 2% target.
- AI infrastructure names led losses: CoreWeave dropped 16%, Nebius 11%, and Oracle 9%.
- Bitcoin miners with AI exposure also sold off, with TeraWulf down 12.64% and IREN down 12.2%.
- Market odds of an October Federal Reserve rate hike briefly exceeded 50% before retreating.
- San Francisco Fed President Mary Daly said more hikes may be needed but not urgently.
US stocks suffered their sharpest selloff since July on Wednesday as hotter-than-expected inflation data weighed on technology and AI infrastructure companies. The S&P 500 fell 1.1%, its biggest one-day decline since July 29, while the Nasdaq Composite lost 1.9% and the Dow Jones Industrial Average slipped 0.1%.
Leading decliners included data center operator CoreWeave, down 16%, AI infrastructure provider Nebius, down 11%, and Oracle, down 9%. Of the 23 AI infrastructure stocks tracked by PRISM’s AI Data Center and Infrastructure Index, 21 declined Wednesday, with an average loss of 7.46%.
Bitcoin miners also extended losses as several have expanded into AI infrastructure. TeraWulf fell 12.64%, while Core Scientific, Cipher Mining and IREN dropped 12.44%, 12.35% and 12.2%, respectively; Riot Platforms, Bitdeer Technologies, MARA and CleanSpark also declined.
Higher interest rates could raise borrowing costs for AI infrastructure companies, many of which depend heavily on debt to fund data center expansion. US consumer prices rose 3.7% in September from a year earlier, exceeding economists’ expectations of 3.6% and staying well above the Fed’s 2% target, with higher gasoline prices from the Middle East war to blame.
The inflation report boosted expectations of an October Federal Reserve rate hike, with the implied probability briefly exceeding 50% before retreating. San Francisco Fed President Mary Daly told Reuters that further rate hikes were likely needed to bring inflation under control, but there was no urgency to act this month.
“I don’t feel urgent that we have to decide with a limited set of information. I think we have the time that we need,” Daly said.
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