Tech stocks took the brunt of a rough week on Wall Street. The Nasdaq Composite fell 4.5% in the week ended Friday, Oct. 16, its worst week since June, as investors grew worried that AI companies are borrowing heavily to build data centers. Hotter-than-expected inflation, Treasury yields near two-decade highs and oil touching $110 a barrel added to the pressure. On Friday alone, the Nasdaq dropped 2.1% — 572.99 points — to close at 26,140.03, while the S&P 500 lost 1.1% and the Dow slipped 0.3%. For the full week, the S&P fell 1.9% but the Dow actually gained 0.7% — the damage was concentrated in technology.
The culprit is AI debt. CoreWeave, which rents out computing power and funds its buildout with borrowed money, fell nearly 12% on Friday and about 24% for the week. Micron lost 14.6%, AMD 6%, Broadcom 4.5%. September CPI came in hot at 3.7% year-over-year, and the 10-year Treasury yield rose to 5.097%. Asia got hit too — South Korea’s Kospi hit circuit breakers, falling 7.57% on Thursday, while Japan’s Nikkei dropped 4.9%.
A rotation, not a liquidation
Not every part of the market fell. Materials and consumer staples led gainers; banks limited losses as money moved toward cash-rich companies and away from richly valued AI names. The week leaves a clear split: older companies with steady cash flows held up, while those spending heavily on AI data centers with borrowed money did not. The Cboe Volatility Index pushed above 22 for the first time in four months.
What comes next
Next week will test whether buyers step back into tech at lower prices. SpaceX reports Tuesday, Tesla and Meta on Wednesday — earnings beats and positive guidance could be a game-changer after the selloff. The Fed announces its rate decision on Oct. 28, with markets pricing a 74% chance of a December hike. The question hanging over Wall Street: can AI’s massive spending translate into profits, or is the debt the story?
