The Closing Bell
A hotter-than-expected CPI print turned a quiet Wednesday into a rate-shock selloff that hit the AI trade hardest and left the major averages deep in the red into the close.
The Fed's inflation problem just got harder.
CPI came in at 3.7% year-over-year with core CPI running 0.3% month-over-month, a report Chicago Fed President Goolsbee bluntly called "discouraging" in live remarks, flagging service-sector inflation as the chief worry and warning that more bad months would be "unacceptable." The Fed's Beige Book added to the unease, with several districts flagging intensifying input price pressures even as employment growth stayed flat to moderate. The dollar (UUP) firmed, gold (GLD) slid 1.5%, and bitcoin dropped to $82,000 as the "higher for longer" rate thesis reasserted itself across every corner of the market. The SPDR S&P 500 (SPY) fell 1.1%, the Nasdaq-tracking QQQ dropped 2%, and small caps (IWM) lost 1.9%.
The AI trade took the brunt of it.
Rate-sensitive, capex-heavy names across semis, data centers, power infrastructure, uranium, copper and space got hit as higher borrowing costs threaten the financing math behind the AI buildout. Nvidia (NVDA) fell 3.1%, AMD (AMD) dropped 5.7%, Broadcom (AVGO) lost 3.1%, and Intel (INTC) slid 4.6%. CoreWeave (CRWV) was the session's biggest mega-cap casualty, down 15.5%, with its CEO publicly pushing back on what he called an "irrational" market reaction. Micron reportedly cratered as much as 25% intraday even as Elon Musk voiced support for the name. Dell, Enphase and Bloom Energy all slid on the same financing-cost worry, while Meta (META) fell 3.2% despite bullish AI commentary from Guggenheim and BlackRock's upbeat fourth-quarter outlook tied to AI investment and fundraising.
Earnings gave financials a mixed tape.
Bank of America (BAC) rose nearly 4% on what traders flagged as a key trading signal, and ASML said the AI boom is giving it real pricing power as chipmakers agree to pay up. Goldman Sachs (GS) slipped despite the sector tailwind. Elsewhere, Perella Weinberg (PWP) and Piper Sandler (PIPR) shares fell after the two reportedly abandoned merger talks, NetApp (NTAP) was downgraded by Barclays, and ImmunityBio (IBRX) jumped on an FDA approval expanding Anktiva's bladder cancer indication. WF Holding (WFF) was halted limit-down after a heavily dilutive $18 million offering.
After the bell and tomorrow.
Eight states suing OpenAI over child-safety claims adds a fresh regulatory overhang to the AI complex heading into Friday's monthly options expiration. With CPI now in the rearview and the Fed's inflation fight back in focus, expect more Fedspeak, continued earnings from regional banks and insurers, and volatility concentrated wherever rate-sensitive capex stories live.
Bottom line: a hot CPI print reminded markets that the AI trade was built on cheap money, and today's selloff is the bill coming due.