AI Sell-Off Deepens on Hot Inflation; Nasdaq Drops 4.5% — SkimNews
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- Nasdaq fell 4.5% last week (its worst since June) as the S&P 500 dropped 2%, but the Dow bucked the trend, gaining 0.7% on a rotation into healthcare, consumer staples, and other less-AI-dependent sectors.
- The Federal Reserve faces pressure to keep rates elevated after September CPI rose 3.7% year-over-year (vs. 3.6% expected) and the September PPI jumped 1.3% for the month and 6.3% annually — the biggest annual gain since March 2022.
- CoreWeave plunged 25% as its total debt climbed past $51 billion, with bond yields and credit default swaps spiking; the VanEck Semiconductor ETF had its worst week since July, down 10%, extending its losing streak to nine sessions.
- Meta Platforms rallied after releasing its Muse Wonder and Muse Wonder Full AI models, which Wells Fargo ranked behind only Anthropic's Claude Opus 5.5; Microsoft closed at a record high Tuesday for the first time in nearly a year.
- Goldman Sachs delivered a standout Q3 with equities trading revenue surging 72% and investment banking fees rising 21%; the CNBC Investing Club upgraded shares to a 1 rating with a $1,200 price target even as the stock surrendered an early rally.
- The CNBC Investing Club rotated beyond AI, adding to Kimberly-Clark as its Kenvue acquisition moved closer, trimming Cardinal Health, buying more Bank of New York on strong earnings, and exiting the remaining Honeywell position.
- CrowdStrike and Palo Alto Networks lost more than 17% and 18% respectively, as reports surfaced that OpenAI is in early talks to acquire cybersecurity firm Trail of Bits.
Why it matters: The AI trade's concentration risk is now visible: CoreWeave's stock fell 25% as its debt climbed past $51B, while CrowdStrike and Palo Alto each lost 17%+. Broadcom's CEO warned capital access is the next industry constraint. With the Club itself rotating into Kimberly-Clark and Bank of New York, AI-heavy portfolios now have fewer safe havens inside the trade.
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