A slide in AI-linked stocks pulled the S&P 500 down 0.8% by mid-morning in New York on Thursday, while Brent crude hit its highest level in five months. Asian indices also fell, and the Fed's next decision arrives on Oct. 28.
The S&P 500 lost 0.8% by mid-morning in New York on Thursday, and the Nasdaq was down 1.5%. Brent crude, the global benchmark, jumped 2.6% to $111.66 a barrel, its highest level in five months.
AI names lead the losses
Nvidia, the largest US company by market value, fell 2.3%. CoreWeave, which borrowed to buy Nvidia chips that it rents out through the cloud, fell 3.8% on worries about its debt.
Meta dropped 5.8% after its profit missed forecasts. Lam Research, a chip equipment maker, slid 7.7% after guiding profit slightly below analyst estimates.
Citadel founder Ken Griffin said on Tuesday that investors are "almost certainly" in an AI bubble. He compared AI chips to airline seats that cost little to run once bought, so prices can collapse when supply outruns demand.
Asian markets extend the selloff
South Korea's Kospi fell 3.52% to 5,533.77, Japan's Nikkei 225 dropped 2.65% and Hong Kong's Hang Seng lost 3.03%. China's CSI 300 entered a bear market, a fall of 20% or more from a recent peak.
The selloff followed the Kospi's 7.57% plunge in a single session on Oct. 15, which triggered a circuit breaker. The index is still more than 40% below its June peak.
Fed decision and data loom
The Federal Reserve's next decision comes Oct. 28, with markets pricing roughly a 15% chance of another rate hike. A December increase is still widely expected.
Core PCE inflation data follows on Oct. 29, and October payrolls arrive Nov. 6.
Source: Decrypt
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