The Nikkei 225 plunged in October, from the ¥67,000 range to the ¥62,000 range, falling 12% in approximately three weeks. The decline was driven by selling in high-priced stocks, particularly semiconductor stocks, as concerns spread about delays in expanding data-center investment. Credit concerns at US-based emerging cloud company CoreWeave also drew attention as a symbol of persistent funding risks, shifting the focus after the US midterm elections to differences in financial risk.
Japanese stocks underwent a major correction in October, with the Nikkei 225 falling from ¥70,683 to ¥62,189, a decline of 12% in approximately three weeks. By contrast, the TOPIX fell only about 5% over the same period, as domestic-demand stocks remained firm. Concentrated selling in high-priced semiconductor-related stocks was a defining feature of the market.
CoreWeave's financial structure was cited as a warning from the credit markets, with yields on some of its bonds reaching 15–16% in mid-October. The company's large upfront investment in data centers and high reliance on debt highlighted the vulnerability of companies dependent on borrowing to deteriorating funding conditions.
S&P's issuer rating for the company was B+, in the speculative-grade range. In the April–June 2026 quarter, its debt, including borrowings and lease liabilities, was approximately 8.5 times its adjusted EBITDA for the quarter annualized. By comparison, Amazon and Meta were said to have debt/EBITDA ratios in the 1x range, while NVIDIA's was below 0.2x.
Among Japanese companies, Tokyo Electron, Disco, Lasertec and Advantest demonstrated stable financial foundations, while Kioxia Holdings was upgraded to BBB by S&P. The nature of financial risk differs between highly debt-dependent neocloud companies and semiconductor-related companies that receive orders for capital equipment and build up earnings and cash.