Overview
- Markets reevaluated the AI investment boom after Wednesday’s September CPI print surprised on the upside, reviving bets that the Federal Reserve may raise interest rates again.
- Federal Reserve Bank of Chicago president Austan Goolsbee warned that the rapid AI data-center buildout is contributing to overheating demand and price pressures.
- AI-linked equities fell sharply, erasing about $80 billion in market value as major names and chipmakers dropped and the Philadelphia semiconductor index extended losses.
- Highly leveraged infrastructure firms such as CoreWeave saw acute credit stress with their bond yields spiking and borrowing costs rising, exposing firms that depend on external financing.
- Investors moved into government bonds while monthly AI-related debt issuance had already fallen steeply since June, tightening the financing window and raising the risk that smaller, loss-making builders will cut projects or jobs.