CoreWeave plunges 15.5% as rate and AI infrastructure financing concerns mount
Key Facts
Shares of cloud computing provider CoreWeave plunged 15.5% on Wednesday, October 14, 2026, marking their worst daily performance since February, according to the Associated Press. The decline came amid a selloff in chip and AI infrastructure stocks that Reuters linked to concerns over higher interest rates and the cost of financing investments. Nvidia fell 3.2%, while Broadcom lost 3.1% in the same session. Advanced Micro Devices dropped 5.7%, with the three stocks among the biggest drags on the market, according to the Associated Press. The losses coincided with the U.S. Bureau of Labor Statistics reporting that annual inflation accelerated to 3.7% in September from 3.4% in August.
Bureau of Labor Statistics data showed the consumer price index rose a seasonally adjusted 0.6% in September from the previous month. The monthly increase in August was 0.4%, reflecting a faster rise in the headline index the following month. Gasoline prices led the increase, jumping 9.1% month on month, according to the official release. Gasoline alone accounted for more than half of the monthly increase in the consumer price index, making it the main driver of the rise. Core prices, which exclude food and energy, rose 0.3% month on month, maintaining the same pace recorded in August.
In its coverage of Wednesday's trading, Reuters said higher interest rates increase companies' borrowing costs to finance data centers and purchase AI chips. These financing pressures extend to spending on the infrastructure cloud computing companies rely on to provide AI services. The concerns also surfaced in credit markets, where the cost of insuring some companies' debt against default rose. The increase included debt issued by Oracle and CoreWeave, according to S&P Global Market Intelligence data cited by Reuters during the session. The cost of insuring that debt reached record levels as the sector's shares came under pressure.
CoreWeave's quarterly results illustrate the scale of its business growth alongside rising financing costs, with revenue reaching $2,575 million in the second quarter of 2026. The company compared that revenue with $1,212 million in the second quarter of 2025, according to its earnings release for investors. Net interest expense rose to $640 million from $267 million in the corresponding period. Among its second-quarter highlights, the company announced it had raised more than $10 billion in unsecured debt and convertible notes. On the demand side, its reported revenue backlog stood at about $104 billion at the end of June, according to the same release.
The reassessment of AI investment opportunities extended to analyst recommendations, with Barclays downgrading Dell and Hewlett Packard Enterprise, according to Reuters. The bank cut both stocks to equal weight from overweight, citing elevated valuations. It also linked its decision to the absence so far of a clear, fundamental transformation from AI, reflecting questions about returns on investment. In subsequent coverage on Thursday, Ulrike Hoffmann-Burchardi of UBS offered a different assessment of what the recent volatility signaled. According to Reuters, she said: "We see the latest bout of volatility as more of a reset in expectations than a fundamental break in the AI investment story."
In the bond market, the yield on 10-year U.S. Treasuries rose 3.6 basis points during Wednesday's trading, according to Reuters. The yield on 2-year Treasuries jumped 7.2 basis points in the same session. According to CME Group's FedWatch tool, the market-implied probability of an October rate hike rose to 37%. That probability stood at 22% on Tuesday, before the repricing in Wednesday's session. The next monetary policy decision is scheduled for the Federal Open Market Committee's October 27–28, 2026 meeting, followed by a press conference, according to the Federal Reserve's calendar.