NewzNEW YORK (AP) — A sell-off for artificial-intelligence stocks is hitting Wall Street again Thursday after whipping around the world on worries about how much longer the AI frenzy will last.The S&P 500 fell 0.3% and is on track for a sixth loss in the seven days since setting its all-time high. The weakness for AI stocks dragged the Nasdaq composite down a market-leading 0.9%, but other kinds of stocks held up better. The Dow Jones Industrial Average was up 291 points, or 0.6%, as of 10:15 a.m.
Eastern time, and the majority of U.S. stocks were rising.The swings came as another report signaled inflation has worsened by even more in the United States than economists expected. Part of the reason prices keep rising so quickly is that customers are continuing to buy things despite them, and a separate report on Thursday said U.S.
retailers made more money last month than economists expected.For AI stocks, the sharp drops started on Wall Street Wednesday and then sent South Korea’s Kospi down 7.6% and Japan’s Nikkei 225 down 4.9% before whipping back to the United States.It’s their latest stunning swing after they led the market for years. Companies are pouring money into AI in hopes of bigger profits and improved productivity. But data centers and AI chips cost money, and many companies have been borrowing the cash to get them.Now, after yields in bond markets worldwide hit their highest levels in years, worries are rising about how resilient that boom in spending can be.
Many AI-related companies have already taken on debt to build out their aspirations, and stocks are struggling under the debt loads.CoreWeave, which offers AI computing power to customers over the cloud, fell 7.8% a day after tumbling 15.5%. It said in the summer that it had $4.41 billion in principal payments to make on its debt over the second half of this year and another $6.18 billion in 2027. It had more than $5.5 billion in cash, as of June 30.High yields in the bond market also generally make investors less willing to pay high prices for stocks, particularly those seen as the most expensive.Nvidia, the chip company that’s ridden the AI boom to become Wall Street’s most valuable company, fell 2.6% and was the day's heaviest weight on the S&P 500.
It came into the day with a nearly 1,415% gain since the end of 2022.The losses came despite a strong profit report from a bellwether of the AI … The Dow Jones Industrial Average was up 251 points, or 0.5%, as of 9:35 a.m. It said in the summer that it had $4.41 billion in principal payments still to make on its debt over the second half of this year and another $6.18 billion in 2027.
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