Credit concerns surrounding CoreWeave heightened caution in the U.S. stock market as a potential sign of an AI slowdown. Earnings, economic data and inflation trends will be the focus this week.
Last week, caution surrounding AI-related stocks intensified in the U.S. stock market, with major indexes moving in different directions. The S&P 500 fell and the Nasdaq declined sharply, while the Dow edged higher. Concerns about a renewed acceleration in inflation and the direction of interest rates weighed on the market.
Credit concerns surrounding CoreWeave amplified market caution. Its corporate bonds fell from 93 cents to 84 cents per dollar of face value, while yields temporarily rose to 15%. Although the president’s views were subsequently released, the declines in both the stock and bonds did not stop.
The focus, according to one view, is less on AI demand itself than on the sustainability of a capital investment model premised on massive borrowing. Demand for GPUs remains firm, and prices in the rental market are also holding up.
Although semiconductor stocks were dragged lower, ASML and TSMC continue to invest in AI, and there is a view that investment appetite remains strong. Caution and optimism are also coexisting over the U.S. earnings season and economic data.