Nasdaq falls 4.5% this week as CoreWeave sinks 25%

CoreWeave and the neoclouds: Fellow AI cloud companies Nebius and IREN each closed down about 11% to 12% Friday and more than 20% for the week, according to Yahoo Finance data. CNBC said CoreWeave's total debt has risen to more than $51 billion. Bloomberg reported that co-founders Michael Intrator, Brian Venturo and Brannin McBee have sold $3.3 billion of company stock since the March 2025 IPO, including $2.4 billion in 2026, MT Newswires said; Reuters has reported that most of the earlier sales were made under prearranged trading plans. Micron fell about 5.6% Friday and about 15% this week, Yahoo Finance data show, after Chinese memory maker CXMT announced progress toward next-generation memory, according to The Wall Street Journal as cited by Quartz.

Oil, inflation and the Fed: Oil added to the pressure. U.S. West Texas Intermediate crude settled up 3.51% at $101.41 a barrel and Brent rose 3.72% to $109.86, CNBC reported, amid U.S.-Iran tensions in the Strait of Hormuz and Ukraine's renewed strikes on Russian refineries. This week's reports showed wholesale prices rising the most since 2022 and consumer inflation running well above the Fed's 2% goal. Fed Chair Kevin Warsh spoke at an IMF event in Bangkok overnight without saying whether the Fed would raise rates before year-end; CME Group's FedWatch tool showed an 82% chance the Fed holds rates at its Oct. 27-28 meeting, CNBC reported. The Cboe Volatility Index, a gauge of expected market swings, topped 22 during the afternoon for the first time in four months, according to CNBC.

How the week unfolded: On Tuesday, the yield on CoreWeave's 2032 bond touched 15%, CNBC reported. On Wednesday, after a hotter-than-expected September inflation report pushed Treasury yields up, CoreWeave fell about 15.5%, its worst day since February, according to Axios and CNBC, and the Nasdaq fell nearly 1.9%. On Thursday, the cost of insuring CoreWeave's debt against default rose above 1,140 basis points intraday, CNBC reported, before the shares closed up 5.94% after Nvidia CEO Jensen Huang said "CoreWeave's financial strength is improving every day." The Dow jumped 556 points that day as money moved into banks, consumer and health care stocks. Friday's drop erased CoreWeave's rebound and sent the Nasdaq to its lowest close of the week.

The case that the selloff is overdone: Huang told reporters in Stockholm he sees no need for Nvidia, CoreWeave's second-largest investor with about a 10% stake, to backstop the company, Reuters reported. CEO Mike Intrator told employees in a memo that the company's backlog "more than supports all of our debt obligations." Reuters reported a $104.2 billion revenue backlog at the end of the second quarter plus more than $25 billion in new commitments early in the third, and that Nvidia has agreed to buy unsold CoreWeave capacity through April 2032. Jefferies and JPMorgan called the fears "overdone," according to CNBC. Angeles Investments chief investment officer Michael Rosen told CNBC that AI debt issuance is worth watching but "we're not remotely close" to excessive levels.

The case for worry: CoreWeave reported negative free cash flow of $5.7 billion in its most recent quarter, Axios reported, so it needs more borrowing or new investors to keep building. Reuters said yields on its 2030 bonds jumped about 500 basis points this week to near 16%, and that third-quarter reports from big cloud companies hinted at data-center delays and slower spending growth. Research firm Gartner said this week that about 80% of neoclouds could shut down by 2030, Reuters reported, and Deutsche Bank's Jim Reid warned the concern "can prove to be a self-fulfilling prophecy." Bank of America strategist Michael Hartnett said the bank is taking a "risk-off" approach for the next month, CNBC reported.

Updated after Friday's close; this story first ran at midday with intraday figures. Closing levels and weekly changes are from Yahoo Finance shortly after the close and may be revised slightly. Default-risk and bond-yield readings are as reported by CNBC and Reuters, not forecasts. Hero is a 2021 file photo of the Nasdaq MarketSite in Times Square, where CoreWeave shares are listed.