Another wipeout for stocks tied to the buildout of AI data centres is overwhelming Wall Street and more than erasing all its gains from the day before, which was its best in three months.
asserted
which → tie → months
The S&P 500 fell 3.5 per cent after opening with a loss that accelerated through the morning.
asserted
that → fall → morning
It’s on track for its worst drop since President Donald Trump shook markets worldwide in April 2025 after announcing his “Liberation Day” tariffs.
asserted
Trump → ’ → tariffs
The losses are set to be more muted on the Australian sharemarket, with futures at 4.51am AEDT pointing to a loss of 36 points, or 0.4 per cent, at the open.
asserted
futures → set → open
The ASX jumped by 2.6 per cent on Thursday as markets rallied following the midterms, with the Democrats’ sweeping win fuelling optimism the Iran war could end soon, sending oil prices plunging.
uncertain
war → jump → prices
The Australian dollar is weaker at US69.52¢.
Stock markets worldwide felt pressure from continued drops for companies that benefited from the boom in the artificial-intelligence technology industry, and South Korea’s Kospi index tumbled 5.3 per cent.
asserted
index → feel → industry
Such stocks have been swinging for months on worries that the construction of further AI data centres may slow because of how expensive it’s become to borrow money.
uncertain
it → swing → money
Tuesday’s US midterm elections added another challenge.
asserted
elections → add → challenge
The nationwide victories by Democrats raised the possibility that governments could force pauses in construction of more data centres.
uncertain
governments → raise → centres
That would mean fewer purchases of AI chips, not to mention electricity and other products and services that are getting vacuumed up in the AI frenzy and driving much of the US economy’s growth.
asserted
that → mean → growth
Nvidia fell 7.5 per cent and was by far the heaviest weight on the S&P 500, a day after dropping 3.2 per cent.
asserted
Nvidia → fall → S&P
Advanced Micro Devices tumbled 14.6 per cent.
asserted
Devices → tumble → ?
CoreWeave, a company that rents access to AI chips to customers over the cloud, fell 12.1 per cent.
asserted
that → rent → cloud
GE Vernova, which has been helping to power data centres, sank 6.1 per cent.
asserted
which → help → centres
AI chip stocks are some of Wall Street’s most influential because they’ve become some of the largest.
asserted
they → become → largest
A 1 per cent move for Nvidia, for example, has more effect on the S&P 500 than a 1 per cent move for nearly any other US stock.
asserted
move → have → stock
The losses were broad, with every sector in the S&P 500 losing ground.
asserted
sector → lose → ground
The overwhelming losses drowned out a few big gains, including a 28 per cent jump for AppLovin after the marketing platform reported both revenue and profit that topped analysts’ expectations.
asserted
that → drown → expectations
The company also approved a program to send up to $US3.2 billion ($4.6 billion) to its investors by buying back its own stock, bringing the program’s total potential value to $US3.6 billion.
asserted
company → approve → billion
Tapestry rallied 6.6 per cent after the company behind the Coach and Kate Spade brands likewise delivered a stronger profit than expected.
asserted
company → rally → profit
It also raised its forecasts for revenue and earnings this fiscal year.
asserted
It → raise → revenue
Stock prices tend to follow where corporate profits and interest rates go over the long term, depending on them much more than on who controls what in Washington.
asserted
who → tend → Washington
In other financial markets, the initial knee-jerk reaction to the US midterm election results faded a bit.
asserted
reaction → fade → results
The price of a barrel of Brent crude oil rose 2.6 per cent to $US97.11 and recovered a chunk of its nearly 9 per cent drop from the day before.
asserted
price → rise → day
Uncertainty still reigns about what will happen in the war with Iran and when the global energy industry can return to normal.
asserted
industry → reign → Iran
In the bond market, Treasury yields continued to ease.
asserted
yields → continue → market
The yield on the 10-year Treasury fell to 4.83 per cent from 4.90 per cent late Wednesday.
asserted
yield → fall → cent
That could be a signal that investors are herding into US Treasury bonds in search of something that’s safer to own than stocks.
uncertain
that → herd → stocks
The drop also came despite some encouraging reports on the US economy.
asserted
drop → come → economy
Fewer US workers applied for unemployment benefits last week.
asserted
workers → apply → benefits
A separate report, meanwhile, suggested overall productivity for US workers improved by more during the summer than economists expected.
uncertain
economists → suggest → summer
That could help the economy grow without adding pressure to the nation’s high inflation.
uncertain
economy → help → inflation
Besides South Korea, Japan’s Nikkei 225 also felt the sting of drops for tech and AI-related stocks and sank 1.8 per cent.
asserted
Nikkei → feel → stocks
London’s FTSE 100 dipped 0.4 per cent after the Bank of England increased its main interest rate for the first time in three years to help limit high inflation.
asserted
Bank → dip → inflation
The bank said its next moves on interest rates largely hinge on what happens with the Iran war, which sent oil prices and inflation higher worldwide.
asserted
which → say → prices
“We’ve seen encouraging news in the past 48 hours,” Bank Governor Andrew Bailey said at a press briefing.
asserted
Bailey → see → briefing
“The best thing that can happen is to resolve the conflict in the Middle East; there’s no question about it.”
asserted
that → happen → it
The Aporia
