AI Infrastructure Stocks Drop Amid Inflation Concerns
AI infrastructure stocks fell sharply on Wednesday as higher-than-expected September CPI figures raised concerns about inflation and potential interest rate hikes. The headline consumer price index rose 3.7% year-over-year, with core CPI at 2.6%. Gasoline prices surged by 9.1%, amplifying fears of persistent inflation due to the Middle East conflict. This led investors to shift toward defensive sectors like healthcare and consumer staples while selling off economically sensitive areas such as tech and industrials. The Nasdaq dropped nearly 2% in afternoon trading, with semiconductor stocks continuing a seven-day losing streak—the worst since May 2025. Broadcom CEO Hock Tan warned that access to capital could become an industry constraint if rates rise further. The iShares Semiconductor ETF (SOXX) fell another 4%, extending its decline over the week. Analysts remain divided, with Truist and Barclays initiating positive coverage on Qnity due to its role in chip manufacturing materials. However, AI infrastructure names like GE Vernova and Eaton were among Wednesday’s biggest laggards.
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Topics: AI stocks inflation interest rates stock market reaction
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