Key facts
- Coreweave and Oracle stocks fell significantly amid a selloff in AI-linked companies.
- US September inflation data exceeded expectations, raising concerns about further Federal Reserve rate hikes.
- Coreweave's credit default swap rates surged above 1,000 basis points.
- Asian equity markets experienced sharp declines.
- Crude oil prices saw a slight easing.
- A container ship was sunk in the Strait of Hormuz, and Saudi Aramco's headquarters were struck.
US and global markets experienced significant volatility as hot September inflation data fueled fears of another Federal Reserve interest rate hike. The release of the figures sent futures markets to a 50-50 chance of a hike this month, with some analysts predicting a potential 50 basis point increase in December. Fed Chair Kevin Warsh is expected to address the issue at an IMF meeting. The AI stock selloff intensified, with data center builder Coreweave and cloud giant Oracle seeing notable declines in both debt and equity. Coreweave's stock dropped 15% and Oracle's 10% on Wednesday, while Coreweave's credit default swap rates surged above 1,000 basis points early Thursday. The broader market pressure led to sharp drops in Asian equities, with South Korea's Kospi falling over 7% and Japan's Nikkei down 5%. Treasury yields initially spiked but then retreated as investors sought safety amid fears of a stock market correction. In energy markets, crude prices eased slightly as the Trump administration considered easing sanctions on vessels transporting oil from sanctioned countries. However, geopolitical tensions remain high, with Ukraine expressing "betrayal" over perceived US favoritism towards Russia and complaining about a lack of early-warning alerts for Russian missile attacks. The conflict in the Middle East also escalated, with a container ship sunk in the Strait of Hormuz and Saudi Aramco's headquarters struck by Iran-aligned Houthis.