US stock markets experienced their most significant decline since July on Wednesday. The S&P 500 dropped 1.1%, the Nasdaq Composite fell 1.9%, and the Dow Jones Industrial Average decreased by 0.1%. This downturn was driven by inflation data showing a 3.7% increase in consumer prices for September, which surpassed the 3.6% forecast and the Federal Reserve's 2% target.
The selloff heavily impacted companies in the AI infrastructure and data center sectors. CoreWeave shares fell 16%, Nebius declined 11%, and Oracle dropped 9%. According to the PRISM AI Data Center and Infrastructure Index, 21 out of 23 tracked stocks saw a decline, with an average loss of 7.46% across the group.
Bitcoin mining firms that have expanded into AI infrastructure also faced significant losses. TeraWulf shares fell 12.64%, Core Scientific dropped 12.44%, Cipher Mining declined 12.35%, and IREN fell 12.2%. Other companies, including Riot Platforms, Bitdeer Technologies, MARA, and CleanSpark, also recorded share price decreases.
Market analysts suggest that rising interest rates may increase borrowing costs for firms reliant on debt to finance data center expansion. The inflation report has heightened expectations for a potential Federal Reserve interest-rate hike in October, although San Francisco Fed President Mary Daly stated there is no immediate urgency to implement such measures this month.
