US Stocks Fall As AI Investment Worries Hit CoreWeave, Broadcom And Semiconductor Stocks, With Nasdaq Down 2.19%

The Nasdaq was on track to lose more than 4% for the week as investors questioned whether heavily indebted artificial intelligence (AI) infrastructure companies could earn enough to repay their borrowings. Higher expected borrowing costs added to those concerns.

The S&P 500 fell 1.22% to 7,649.71 points on Friday, 16 October 2026. The Nasdaq declined 2.19% to 26,128.13, while the Dow Jones Industrial Average slipped 0.55% to 51,891.77.

AI Stocks Fall As Investors Question Returns And Debt

CoreWeave, backed by Nvidia, dropped 12% on Friday, taking its five-session loss to around 25%. Its bonds also sold off sharply, pushing yields above 15%.

Broadcom fell 3.6%, while the Philadelphia Semiconductor Index lost 2.5% and was heading for an eighth consecutive day of declines.

Concerns also spread to AI company valuations. Some existing and prospective investors in Anthropic were considering a lower valuation ahead of its planned initial public offering (IPO).

On the same day, oil prices rose more than 3% amid concerns about supply from the Middle East. High oil prices tend to weigh on stock price-to-earnings multiples, making investors more cautious.

S&P 500 And Nasdaq Face Steepest Weekly Losses In Months

Six of the 11 S&P 500 sector indexes ended lower, led by communication services, which fell 2.52%. Information technology declined 2.38%. The S&P 500 was heading for its biggest weekly loss since January, while the Nasdaq was on track for its sharpest weekly fall since June.

The broader market also showed signs of weakness. Although the S&P 500 remained up around 12% in 2026, its median constituent had gained only about 6%, and roughly 185 stocks in the index were down for the year.

Declining stocks outnumbered advancing ones by 1.3 to 1. The S&P 500 recorded 19 new highs and one new low, while the Nasdaq registered 49 new highs and 263 new lows.

Attention now turns to the next round of quarterly earnings, with Tesla, Meta Platforms and Procter & Gamble (P&G) due to report. Analysts expect earnings to rise by more than 30% on average, driven by large AI-related technology companies, according to London Stock Exchange Group (LSEG) data.

China’s AI Stocks Also Take A Hit

China’s Star50 index fell nearly 40% in the first half of 2026, becoming the world’s worst-performing major tech gauge. Meanwhile, a hardware-focused ChiNext index declined 36% during this period. Moore Threads, known as “China’s Nvidia”, dropped from 942 Chinese Yuan (CNY) to 327 CNY after surging 500% on its debut in December 2025.

The Star50 had traded at 80 times forward earnings at its 30 June 2026 peak, but its valuation has since fallen to 40 times. However, it has outperformed South Korea’s KOSPI, which trades at less than five times after the recent meltdown.

Analysts warned that the decline may be a technical pullback rather than a buying opportunity, with some high-potential technology stocks potentially needing to fall another 30% to 50% before their valuations become attractive.

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