Nasdaq Drops 1.88% as Hot Inflation Data and AI Debt Fears Weigh on Tech Stocks

Major US stock benchmarks ended lower, driven by a sharp drop in technology shares. The Nasdaq Composite index dropped 1.88% to close at 26,692.87, while the S&P 500 slipped 1.11% to 7,718.94. The Dow Jones Industrial Average experienced a smaller decline, falling 0.09% to 51,621.48.

A hotter-than-expected inflation report rattled investors, as headline CPI rose 3.7% year-over-year in September, topping forecasts. Core inflation also climbed faster than anticipated, pushing interest-rate futures to briefly price in a higher likelihood of an October rate increase. At the same time, growing worries over mounting debt loads at artificial intelligence infrastructure firms pressured the broader tech sector. Cloud provider CoreWeave dropped 15.46% amid concerns over its borrowing costs for data center expansion, dragging semiconductor makers lower as well.

Investors will be watching upcoming inflation readings and central bank signals to gauge whether monetary policy will tighten further. Market participants are also keeping a close eye on safe-haven assets and corporate balance sheets to see if high borrowing costs continue to weigh on technology capital spending.