Wall Street ended October 14 with a sharp sell-off after higher-than-expected US inflation. The S&P 500 lost 1.1%, its worst result since July 29. The Nasdaq Composite fell 1.9%, its worst session since July 23. The Dow Jones barely moved and closed the day down about 0.1%.
The sell-off spread to Asia
On the morning of October 15, the pressure spilled over into Asian markets. South Korea's KOSPI index plunged by about 8%. The heaviest pressure hit shares of the largest memory manufacturers and other companies tied to the technology sector.
The main trigger - US inflation
US September CPI rose to 3.7% year over year versus a forecast of 3.6%. That is noticeably above the Fed's 2% target. After the release, the market sharply raised the probability of another rate hike at the very next meeting. Later, expectations eased somewhat, but the fact of higher inflation itself intensified fears about more expensive financing.
Why AI companies fell the hardest
Companies tied to AI infrastructure are especially sensitive to the cost of money. Building data centers and computing infrastructure requires large capital expenditures, often involving debt. With higher rates, such projects become more expensive. Against this backdrop, CoreWeave lost about 16%, Nebius - 11%, Oracle - 9%. Of the 23 stocks in the AI infrastructure sector index, 21 closed in the red. The average decline was about 7.46%.
Chipmakers lost about $1 trillion
During the sell-off, the combined market capitalization of chipmakers shrank by roughly $1 trillion. This shows how quickly the market revalued the most expensive technology stories after the change in rate expectations. The hardest hit were companies that had previously risen on expectations of a prolonged boom around artificial intelligence.
Bitcoin miners also came under pressure
The risk spillover affected more than just the traditional technology sector. Bitcoin miner stocks also fell sharply. TeraWulf lost about 12.64%, Core Scientific - 12.44%, Cipher Mining - 12.35%, IREN - about 12.2%. This reflects a broader investor retreat from highly volatile assets.
Where the money went
Capital didn't just leave the market. Amid the stock sell-off, demand for US government bonds increased. Treasury prices rose for a second day in a row. This move shows some investors shifting into safer instruments.
What the Fed says
At the same time, caution persists within the Fed. Regulator officials are signaling that they don't want to make hasty decisions given the limited amount of new data. This keeps markets in a mode of high sensitivity to every new macroeconomic release.
What's next
The main question now is whether the revaluation of the technology sector will continue. If inflation and labor market data remain strong, expectations of higher rates may continue to weigh on the Nasdaq and AI companies. If macroeconomic data starts to cool, the market could quickly recover part of its losses. For now, volatility remains elevated, and every new release can sharply change the direction of the indices.
Did you see this candle on the Nasdaq?
A move of nearly 2% in a single session for a major index already provides a noticeable trading range. For a prop trader, not only the scenario itself matters, but also the available trading nominal. In prop trading, the company provides a trading account after you pass the challenge, and profits are distributed according to pre-established conditions. It's better to understand the mechanics in advance, before the next day like this.