U.S. AI and chip stocks tumble as 5% Treasury yields stoke AI funding fears; Apple tops $5 trillion
First seen · Oct 17, 4:04 AM (Seoul) · Last updated · Oct 17, 4:04 AM (Seoul)
AI and semiconductor stocks sank as Treasury yields above 5% fueled worries about the cost of AI infrastructure spending, with the Nasdaq falling 1.88% on Oct. 14. Markets steadied on Oct. 15 as the Dow rose more than 1%, and Apple’s market value was reported to have topped $5 trillion.
What happened
After hotter-than-expected inflation data on Oct. 14 local time, the Nasdaq Composite closed down 1.88% at 26,692.87 and the S&P 500 fell 1.11% to 7,718.94. On Oct. 15 the semiconductor index slipped 0.88% for a seventh straight decline, but the S&P 500 gained 0.33% and the Dow jumped 556 points (1.08%).
Why it's trending
With Treasury yields above 5%, concerns spread that financing the enormous AI infrastructure buildout will become more expensive. The heavy debt already carried by many AI companies was also cited as a burden. Asian markets were hit harder, with South Korea’s KOSPI falling more than 7% the same day.
Reactions
Dan Ives, tech analyst at Yorkville Ives, called the drop a buying opportunity. Apple, seen as a relative safe haven, was reported to have surpassed $5 trillion in market value, and CoreWeave, which plunged 15% the day before, recovered its losses after Nvidia CEO Jensen Huang struck an optimistic tone.
What to watch
Concerns about a memory chip glut around 2029 are also weighing on sentiment. With U.S. inflation climbing to 3.7% in September, interest rates remain a key variable.