S&P 500 and Nasdaq Under Pressure as AI Stocks Weigh on the Market

The S&P 500 and Nasdaq Composite indices weakened during Thursday’s trading session (October 15) as investors grew increasingly concerned about the heavy spending by technology companies on artificial intelligence (AI) development, all while US inflation remains persistently high. The S&P 500 fell 0.5%, while the tech-heavy Nasdaq dropped 1.3%. In contrast, the Dow Jones Industrial Average rose 269 points, or 0.5%.

The most significant pressure stemmed from AI-related stocks. CoreWeave shares fell 7%—after having plunged more than 15% earlier—amid investor concerns regarding the high levels of debt the company has taken on to fund the construction of AI infrastructure. Similar anxieties weighed on semiconductor stocks, with Micron Technology down 4%, Advanced Micro Devices down 5%, and SanDisk down 6%.

Sentiment toward the AI ​​sector was further dampened by reports regarding Anthropic’s revenue, which reached $16.8 billion in the third quarter. Investors have begun to question whether the revenue growth of AI companies can justify the lofty valuations of tech firms and chipmakers that have benefited from the boom in AI investment.

On the other hand, non-tech sectors provided some cushion against market pressure. Walmart shares climbed 4%, while Merck rose more than 3%. These gains helped limit the decline in the major indices, particularly the Dow Jones, which has greater exposure to sectors outside of technology.

Market pressure was also fueled by US producer inflation data. The Producer Price Index (PPI) for September surged 1.3% month-on-month and 6.3% year-on-year—the largest increases since 2022—surpassing economists' expectations of 0.6% and 5.5%, respectively. This data—following an earlier CPI report that showed higher-than-expected inflation—has further fueled concerns that price pressures persist.