The Nikkei Average plunged after recovering to ¥70,000, closing at ¥64,426. The CoreWeave shock spread through the market against a backdrop of funding concerns surrounding AI-related stocks.
The optimism seen in the first half of October quickly gave way to rising caution across global equity markets. Sharp corrections progressed particularly in Japanese, US and Asian markets with high weightings in technology stocks, with excessive debt and profitability concerns at AI-related companies, along with a renewed acceleration in US inflation, cited as the main factors.
Although major Japanese and US stock indexes have shown signs of maintaining their strength, their underlying performance has increasingly diverged. A sharp rise in CoreWeave’s bond yields and a collapse in its share price exposed the funding risks of AI infrastructure investment to the market. The SOX Index fell for consecutive days, and the market capitalization of semiconductor-related companies contracted sharply.
Japanese equities saw the Nikkei Average recover to ¥70,000 on 6 October, but the “CoreWeave shock” hit hard through 15 October, resulting in a 3,318-point one-day decline, the third-largest drop on record. Semiconductor and AI-related stocks were at the centre of trading, while concerns over a slowdown in domestic consumption caused by higher oil prices and interest rates also weighed on the market. Nikkei futures have fallen to the ¥63,000 range.
Going forward, the market is expected to focus on the funding environment for AI-related investment, US interest-rate trends and the supply-demand balance for semiconductor-related stocks. Continued information disclosure and further market developments will be closely watched.