Oct 16 (Reuters) - Wall Street tumbled on Friday, with CoreWeave, Broadcom and other AI-related technology stocks under renewed pressure, while a jump in oil prices spooked traders heading into the weekend.
The Nasdaq was on track for a loss of over 4% for the week, hammered by concerns that debt-laden AI infrastructure companies may not turn profits in time to repay debts, particularly with borrowing costs expected to rise.
Nvidia-backed CoreWeave (CRWV.O),slumped 12%, bringing its loss over the past five sessions to about 25%. The data center operator's bonds also sold off sharply this week, pushing yields above 15%.
Broadcom (AVGO.O),fell 3.6%, and the PHLX chip index (.SOX),sank 2.5%, on track for its eighth straight day of declines.
Investors on Friday were also watching oil prices jump more than 3% due to Middle East supply worries.
"There is some fear in the market," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. "High oil prices, in particular, tend to weigh on the price/earnings multiple of stocks, and so I think you have investors looking to be cautious into the weekend rather than take more risk."
Adding to concerns around AI financing, some current Anthropic investors and prospective investors are weighing a lower valuation for the company in its upcoming IPO, Reuters reported, citing people familiar with the matter.
The S&P 500 was down 1.22% at 7,649.71 points.
The Nasdaq declined 2.19% to 26,128.13 points, while the Dow Jones Industrial Average was down 0.55% at 51,891.77 points.
Six of the 11 S&P 500 sector indexes declined, led lower by communication services (.SPLRCL), , down 2.52%, followed by a 2.38% loss in information technology (.SPLRCT), .
The S&P 500 was set for its steepest weekly loss since January, and the Nasdaq was heading for its sharpest weekly fall since June.
Third-quarter earnings season shifts into gear next week with reports from Tesla (TSLA.O), , Meta Platforms (META.O),and Procter & Gamble (PG.N), . Analysts on average see quarterly earnings surging over 30%, driven by
AI-related megacaps, according to LSEG data.
While the S&P 500 remains up about 12% in 2025, most of that gain has come from AI-related tech stocks, and the index’s median component has climbed only about 6%, year to date. About 185 S&P 500 stocks have lost ground in 2025.
Hotter-than-expected consumer and producer inflation reports this week showed price pressures were extending beyond energy commodities.
Federal Reserve Chair Kevin Warsh on Friday voiced optimism about US economic strength and surprise about how well global economies have been "hanging in there" during a lingering energy shock and tighter monetary policy to fight inflation.
Markets increasingly expect the Fed to keep interest rates unchanged this month. Barclays now expects 25-basis-point hikes each in December and January.
Tesla (TSLA.O),dropped 2.5% after the electric-vehicle maker unveiled a redesigned Roadster, powered by rocket-style thrusters, developed in collaboration with SpaceX.
Netflix (NFLX.O),appointed former Disney executive Peter Rice as chief content officer on Thursday. Its shares were down 2.9%.
Declining stocks outnumbered rising ones within the S&P 500 (.AD.SPX),by a 1.3-to-one ratio.
The S&P 500 posted 19 new highs and one new low; the Nasdaq recorded 49 new highs and 263 new lows.
Reporting by Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru, and by Noel Randewich in San Francisco; additional reporting by Vidya Ranganathan; Editing by Joyjeet Das, Shinjini Ganguli and David Gregorio
