AI sell-off hands Nasdaq worst week since June
Chipmakers led the retreat. The VanEck Semiconductor ETF lost 3% Friday and 10% for the week, its biggest weekly decline since April 2025, amid concerns about competition from China. In South Korea, the Kospi fell 14.5% on the week, its worst since October 2008, as Samsung and SK Hynix tumbled nearly 20% and 25%.
Debt worries spread from CoreWeave
Investors are also questioning how the AI build-out is financed. Shares of CoreWeave, a Nvidia-backed AI cloud provider, fell nearly 12% Friday, bringing weekly losses to 25%, CNBC reported. Reuters reported that yields on its 2031 bonds topped 16%. It also reported that the cost of insuring the company’s roughly $50 billion in debt implied a nearly 63% chance of default within five years.
Oracle, which has also borrowed heavily for data centers, closed 8.8% lower Wednesday, SiliconANGLE reported. In a memo to staff reported by SiliconANGLE, CoreWeave CEO Mike Intrator wrote that “when you are building a new type of technology company there will be periods of time when the market misunderstands and acts irrationally. We are confident in our backlog which more than supports all of our debt obligations.”
“The question is: Is this a systemic issue?” said Michael Rosen, chief investment officer at Angeles. “Obviously, increased debt issuance is something to observe and continue to watch and be concerned about if it continues to get to levels of excessiveness. But we’re not remotely close to that right now.”
Inflation, oil and the Fed
Energy prices added pressure. West Texas Intermediate futures settled at $101.41 a barrel, up 3.51%, and Brent rose 3.72% to $109.86. Iran escalated attacks in the Strait of Hormuz, and Ukraine vowed to keep striking Russian refineries, CNBC reported.
