CoreWeave's plunge signals broader stock market risk

Wall Street strategists warn that declines in AI cloud-computing provider shares, led by CoreWeave's 41% drop since Oct. 6, could drag the broader U.S. stock market down to its June lows, a 4.7% fall from Friday's record close. Investor concerns center on heavy debt loads among "neoclouds" funding AI build-outs, with peers Iren Ltd. and Nebius Group NV down 40% and 36%, respectively. Rising Treasury yields and entrenched inflation have raised financing costs, pushing credit risk measures for major tech spenders to new highs last week. Elon Musk warned Sunday that debt markets have "almost entirely shut off" for companies lacking substantial independent revenue, predicting consolidation among over 200 neoclouds. The Philadelphia Semiconductor index has dropped over 13% in October, though strategists note selling has so far remained contained to tech and growth stocks.