The Nasdaq has fallen to near one-month lows, weighed by a worsening sell-off in artificial intelligence-linked stocks on fears rising interest rates could affect artificial intelligence investments, and fresh data pointing to building US price pressures.
The S&P 500 and the Nasdaq marked their biggest one-day fall since July on Wednesday after hotter-than-expected consumer inflation data fuelled expectations of further interest-rate hikes from the US Federal Reserve, dragging on tech stocks.
Semiconductor maker TSMC's cautious note for 2027, citing macroeconomic uncertainties, also dented sentiment.
Reports that AI lab Anthropic's third-quarter revenue surged 45 per cent compared to the previous quarter failed to lift investor spirits.
Heavily indebted data-centre operator CoreWeave, sitting in the eye of the recent tech storm, lost 8.5 per cent following a 15 per cent drop on Wednesday, while cloud computing giant Oracle was down marginally after a nearly 9.0 per cent fall in the previous session.
The companies' bonds also fell, pushing their yields to record highs.
Chip makers lost ground, with Nvidia down 3.3 per cent and Micron Technology and Advanced Micro Devices losing 5.0 per cent and 6.4 per cent respectively.
The broader chips index will have shed $US2 trillion ($A2.9 trillion) in a more-than-14 per cent slide in seven sessions, if losses hold.
It would mark its longest losing streak since May 2025.
The S&P 500 information technology sector was the biggest drag, down 2.0 per cent.
The slump pushed investors to government bonds, with the benchmark 10-year US Treasury yield at a three-week low of 5.0725 per cent.
"Investors are increasingly questioning how much future growth is already priced into valuations, how expansion is being financed and when these investments will generate sufficient returns," Charu Chanana, chief investment strategist at Saxo, said in a note.
"The repricing of CoreWeave's debt suggests that investors are becoming less willing to finance AI infrastructure growth at any cost."
In early trading on Thursdsay, the Dow Jones Industrial Average rose 163.58 points, or 0.32 per cent, to 51,785.06, the S&P 500 shed 32.20 points, or 0.42 per cent, to 7,686.74, and the Nasdaq Composite lost 283.07 points, or 1.06 per cent, to 26,409.80.
The CBOE Volatility Index, known as Wall Street's fear gauge, hit a two-week high and was last up 0.83 points at 17.74.
Investors continued to segue into traditionally defensive sectors, with healthcare and consumer staples rising more than 2.0 per cent each.
Gains in these stocks propped up the Dow.
The Nasdaq has dropped more than 4.0 per cent from record highs touched last week, with concerns about higher borrowing costs and AI spending threatening to eclipse the third-quarter earnings season when S&P 500 profits are expected to grow 30.6 per cent, according to LSEG data.
Data showed US producer prices increased by the most in four and a half years in September amid rising goods and services costs, the latest indication of inflation broadening out beyond energy products.
Markets will scrutinise Fed chair Kevin Warsh's speech before the International Monetary Fund Annual Meeting.
Shares of Rocket Lab dropped 15 per cent after the space company said the inaugural launch of its new larger Neutron rocket was delayed until next year.
FMC slid more than 38 per cent after the agrichemicals company sharply cut its third-quarter outlook, which includes a $US625 million-$US675 million hit from commercial actions.
Advancing issues outnumbered decliners by a 1.78-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
The S&P 500 posted 20 new 52-week highs and no new lows while the Nasdaq Composite recorded 29 new highs and 261 new lows.