AI trading risks crush US stocks, fear index surges, chip stocks close lower for eighth consecutive session

BlockBeats news, October 17 - U.S. stocks fell across the board on Friday, as doubts over AI investment returns combined with surging international oil prices triggered another selloff in tech stocks. The Nasdaq Composite closed down 2.15%, the Nasdaq 100 fell 2.5%, and the S&P 500 dropped 1.1%. The Nasdaq fell 4.48% for the week, while the Dow rose 0.68%, marking the widest weekly performance gap between the two since July 2002.

The AI supply chain bore the brunt of the selloff. Cloud computing service provider CoreWeave plunged 12%, with its bond yields briefly topping 15% during the week, fueling market concerns over AI data center financing models and debt risks. The Philadelphia Semiconductor Index fell for an eighth consecutive trading day, its longest losing streak since 2008; the memory concept index dropped 6.28% in a single day, with SK Hynix ADR down over 6.5%, SanDisk down over 6.8%, Micron Technology down over 5.6%, and optical communications company Coherent down more than 7%.

In energy markets, Brent crude rose over 3% intraday, settling near $110 per barrel, while WTI crude gained 3.8% to $101.71, with U.S. oil rising for a seventh consecutive trading day. The VIX fear index briefly broke above 22 intraday, the first time in four months. Meanwhile, the dollar index fell to a more than two-week low, and the offshore yuan broke above 6.69 intraday, hitting its highest level since July 2022.

On the macro front, U.S. Treasury yields edged higher on Friday but declined overall for the week. The market interpreted Fed official Warsh's remarks that economic conditions are in line with expectations as a signal that a rate hike could be paused in October. With tech giants set to report earnings soon, market focus is shifting from AI computing demand to whether massive capital expenditures can deliver profits and whether high-cost financing will further weigh on industry valuations.