Nasdaq falls 2.15% as AI debt worries hit tech shares; CoreWeave drops about 12%

US technology shares fell on Friday 16 October as concerns grew about the debt being used to fund artificial intelligence infrastructure.

The Nasdaq Composite closed 2.15% lower at 26,140.03, the S&P 500 fell 1.09% to 7,659.44, and the Dow Jones Industrial Average slipped 0.34% to 52,002.41, according to closing data compiled from Yahoo Finance. CNBC reported the Nasdaq lost 4.5% over the week.

Data centre operator CoreWeave fell nearly 12% on Friday and lost about a quarter of its value over the week, CNBC reported. The yield on one of its bonds due in 2031 almost reached 16% during the week, and the cost of insuring its debt against default rose. Reuters reported that investors were concerned data centre operators might not become profitable in time to repay debt as borrowing costs rise.

Nvidia chief executive Jensen Huang said on Thursday that CoreWeave’s financial position was stable and “improving every day”, according to CNBC. Nvidia is a major CoreWeave shareholder.

Not every sector fell. Reuters reported that energy and financial shares rose during the session, and that gains in Goldman Sachs and JPMorgan Chase lifted the Dow to its highest level in more than a month during the session. The index still closed lower.

The 10-year US Treasury yield ended near 5.1%.