Another wipeout for stocks tied to the buildout of AI data centers is overwhelming Wall Street on Thursday 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.
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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.
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Trump → ’ → tariffs
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.
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index → feel → industry
Such stocks have been swinging for months on worries that the construction of further AI data centers may slow because of how expensive it’s become
uncertain
it → swing → centers
Tuesday’s U.S. midterm elections added another challenge.
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elections → add → challenge
The nationwide victories by Democrats raised the possibility that governments could force pauses in construction of more data centers.
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governments → raise → centers
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 U.S. economy’s growth.
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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.
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Nvidia → fall → S&P
Advanced Micro Devices tumbled 14.6 per cent.
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Devices → tumble → ?
CoreWeave, a company that rents access to AI chips to customers over the cloud, fell 12.1 per cent.
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that → rent → cloud
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GE Vernova, which has been helping to power data centers, sank 6.1 per cent.
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which → get → centers
AI chip stocks are some of Wall Street’s most influential because they’ve become some of the largest.
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they → become → largest
A one per cent move for Nvidia, for example, has more effect on the S&P 500 than a one per cent move for nearly any other U.S. stock.
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move → have → stock
The losses were broad, with every sector in the S&P 500 losing ground.
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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.
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that → drown → expectations
The company also approved a program to send up to US$3.2 billion to its investors by buying back its own stock, bringing the program’s total potential value to $3.6 billion.
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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.
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company → rally → profit
It also raised its forecasts for revenue and earnings this fiscal year.
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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.
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who → tend → Washington
In other financial markets, the initial knee-jerk reaction to the U.S. midterm election results faded a bit.
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reaction → fade → results
The price of a barrel of Brent crude oil rose 2.6 per cent to $97.11 and recovered a chunk of its nearly nine per cent drop from the day before.
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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.
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industry → reign → Iran
In the bond market, Treasury yields continued to ease.
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yields → continue → market
The yield on the 10-year Treasury fell to 4.83 per cent from 4.90 per cent late Wednesday.
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yield → fall → cent
That could be a signal that investors are herding into U.S. Treasury bonds in search of something that’s safer to own than stocks.
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that → herd → stocks
The drop also came despite some encouraging reports on the U.S. economy.
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drop → come → economy
Fewer U.S. workers applied for unemployment benefits last week.
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workers → apply → benefits
A separate report, meanwhile, suggested overall productivity for U.S. workers improved by more during the summer than economists expected.
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economists → suggest → summer
That could help the economy grow without adding pressure to the nation’s high inflation.
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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.
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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.
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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.
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which → say → prices
“We’ve seen encouraging news in the past 48 hours,” Bank Gov. Andrew Bailey said at a press briefing.
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Bailey → see → briefing
“The best thing that can happen is to resolve the conflict in the Middle East; there’s no question about it.”
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that → happen → it
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