Wall Street warns U.S. stocks may fall another 4.7%, as CoreWeave's continued plunge fuels AI credit concerns

BlockBeats news, October 26 - According to Bloomberg, the sharp decline in AI cloud computing companies' stock prices is spreading to tech stocks and even the broader U.S. stock market. Since major U.S. stock indices hit new highs on October 6, CoreWeave's stock has fallen 41%, while Iren and Nebius have dropped 40% and 36% respectively.

The market is concerned that AI infrastructure companies rely heavily on debt financing and may further increase borrowing after earnings reports are released. As U.S. Treasury yields rise and inflation persists, financing costs for related companies continue to climb, and credit risk indicators for AI investments at some large tech companies have also reached new highs.

Ohsung Kwon, Chief Equity Strategist at Wells Fargo, warned that if new cloud computing companies cut capital expenditures due to financing pressure, the semiconductor industry will face a major impact. The Philadelphia Semiconductor Index has fallen 15% so far in October.

Brian Reynolds, Chief Market Strategist at Reynolds Strategy, stated that the sell-off is evolving from individual corporate events into a macro risk, and predicted that the S&P 500 index could fall back to early June lows, a further decline of about 4.7% from last Friday's closing level. Meanwhile, concerns about an AI bubble and high-risk debt defaults continue to intensify.