US stock markets experienced their steepest decline since July on Wednesday as inflation data surpassed expectations, hitting technology and artificial intelligence infrastructure companies particularly hard. Bitcoin mining firms also faced significant drops alongside the broader tech sector.
Major tech and AI infrastructure stocks slide
The S&P 500 index fell 1.1%, recording its largest single-day loss since July 29. The Nasdaq Composite lost 1.9%, marking its most significant decrease since July 23. Meanwhile, the Dow Jones Industrial Average slipped 0.1% over the same period.
Among tech firms, data center operator CoreWeave suffered a 16% loss, while Nebius, an AI infrastructure provider, dropped by 11%. Oracle also saw its shares fall by 9% during the session.
Analysis from PRISM’s AI Data Center and Infrastructure Index, a benchmark tracking 23 prominent companies in the sector, showed that 21 of these stocks declined on Wednesday. The average drop across this group reached 7.46%.
Mini dictionary: PRISM’s AI Data Center and Infrastructure Index, a market index tracking the performance of leading technology companies involved in the development and operation of AI-focused data centers and supporting infrastructure.
The downturn in tech equities also impacted several companies that straddle cryptocurrency mining and AI services. TeraWulf fell by 12.64%, while Core Scientific lost 12.44%, Cipher Mining dropped 12.35%, and IREN decreased by 12.2%. Riot Platforms, Bitdeer Technologies, Marathon Digital Holdings (MARA), and CleanSpark reported declines as well.
| Company | Daily Change (%) |
|---|---|
| CoreWeave | -16.0 |
| Nebius | -11.0 |
| Oracle | -9.0 |
| TeraWulf | -12.64 |
| Core Scientific | -12.44 |
| Cipher Mining | -12.35 |
| IREN | -12.2 |
Higher rates pressure tech and crypto mining firms
Rising interest rates are posing additional challenges for AI infrastructure companies, many of which depend on substantial borrowing to fund their expansion and data center development.
US consumer prices rose 3.7% year-on-year in September, outpacing economists’ forecasts of 3.6% and remaining above the Federal Reserve’s 2% inflation target. Analysts attributed part of the surge to elevated gasoline prices, which have been linked to unrest in the Middle East.
In response to the higher-than-expected inflation print, market participants briefly saw the implied probability of an October interest rate hike from the Federal Reserve rise above 50% before it later declined.
Fed signals caution despite inflation spike
Mary Daly, President of the Federal Reserve Bank of San Francisco, indicated that although further rate increases could be necessary to manage inflation, policymakers should not rush their decisions.
“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 stated.
Despite mounting expectations, Daly emphasized that the central bank is prepared to take more time to assess incoming data before committing to additional policy tightening.
