US Stock Market Today: Nasdaq Falls Nearly 2% As Hot Inflation Hits AI Stocks; S&P 500 Drops 1.1%

US stocks ended sharply lower on Wednesday, October 14, with the Nasdaq Composite falling nearly 2% after hotter-than-expected inflation revived expectations of another Federal Reserve rate hike and triggered a sell-off in AI and technology stocks.

The Nasdaq dropped 1.88% to close at 26,692.87, its biggest one-day fall since July 23, while the S&P 500 declined 1.11% to 7,718.94. The Dow Jones Industrial Average recovered from its intraday lows but still ended 0.09% lower at 51,621.48.

The sell-off followed US inflation data showing consumer prices rose 3.7% year-on-year in September, above expectations of 3.6% and up from 3.4% in August. The hotter reading prompted traders to increase bets on another Federal Reserve rate hike, putting pressure on stocks sensitive to higher borrowing costs.

AI and technology stocks bore the brunt of the selling. Oracle fell 8.8%, CoreWeave dropped 15% and Nebius lost 10%. Dell Technologies declined 11.4%, while Hewlett Packard Enterprise fell 8.2%. The Philadelphia Semiconductor Index dropped 4.3%, extending its losing streak to a sixth session.

Why Did Nasdaq Fall Today?

The sharp fall in technology stocks came as investors reassessed the impact of higher interest rates on companies spending heavily on AI infrastructure and data centres.

Higher borrowing costs can make large AI investments more expensive, particularly for companies dependent on debt to fund expansion. The latest inflation data raised concerns that US interest rates could remain elevated for longer or rise further.

Technology was the weakest major S&P 500 sector on Wednesday, falling 2.6%. Eight of the 11 major sectors ended lower.

Impact On Indian Markets

The Wall Street sell-off has weakened global cues ahead of the Indian market opening on Thursday. GIFT Nifty was trading around 22,600 in early trade, indicating a muted start for the Sensex and Nifty 50.

Asian markets were also sharply lower, particularly technology-heavy markets. South Korea's Kospi fell more than 6% in morning trade, while Japan's Nikkei dropped more than 3%, extending the sell-off in semiconductor and technology shares.

Indian IT stocks will therefore be among the sectors to watch after the Nasdaq and US semiconductor sell-off. The broader market will also track US interest-rate expectations, foreign investor flows and crude oil prices.

The Sensex had closed 251.89 points, or 0.34%, lower at 72,781.89 on Wednesday, while the Nifty 50 fell 99.25 points, or 0.44%, to 22,622.70.

Also Read - Zetwerk Anchor Book Gets ₹2,251 Crore From Institutional Investors Including BlackRock, Goldman Sachs Ahead Of October 15 Opening