AI's shaky finances rattle markets as investors flee tech stocks

Markets showed unusual signs of investor nervousness on October 22, driven by growing concerns about AI's financial sustainability, with a historic divergence between S&P 500 measurements and a sharp drop in Treasury yields. The market-cap-weighted S&P 500 fell 1.2% while the equal-weighted index rose 0.5%, a gap seen only twice since 1995, and the 10-year Treasury yield saw its largest single-day decline since March 2023. Investors shifted money from tech into bonds and non-tech stocks, prompted by worries over AI companies' shaky balance sheets, including CoreWeave's 15% borrowing costs and Anthropic's reported $81 billion loss. These concerns add to existing pressures from Iran war-driven inflation, rising US debt, and massive AI infrastructure spending, though analysts note the situation may be a temporary bump or the start of a broader correction, with the economy's resilience uncertain.