NEW YORK — U.S. stocks fell sharply, led by technology shares, as concerns over artificial intelligence-related debt combined with a surge in oil prices.
The Dow Jones Industrial Average closed on the 16th at 52,002.41, down 175.28 points, or 0.34%, from the previous session. The Standard & Poor's 500 ended at 7,659.44, down 84.62 points, or 1.09%, while the Nasdaq Composite finished at 26,140.03, down 572.99 points, or 2.15%.
Among the largest companies by market value, most technology stocks weakened. Nvidia fell 1.43%, Microsoft dropped 1.93%, Amazon declined 1.87%, Google parent Alphabet lost 2.47%, TSMC fell 2.28%, SpaceX slipped 1.74%, Facebook parent Meta dropped 3.72%, Broadcom fell 4.52%, Tesla lost 2.13%, SK hynix tumbled 6.58%, Micron fell 5.63% and AMD dropped 5.95%. The Philadelphia Semiconductor Index plunged 3.83%. By contrast, Apple, seen as lagging in the AI race, rose 0.43%, while non-technology names advanced, with Eli Lilly up 0.43%, Walmart up 0.80% and JPMorgan up 1.25%.
Stocks were under pressure from the opening bell on concerns that high interest rates could increase the debt burden tied to massive AI infrastructure spending. Weighing on technology shares in particular was news that the five-year credit default swap spread on CoreWeave, a cloud company building data centers to lease to big technology firms, had soared to a record high. Market pricing implied a probability of more than 60% that CoreWeave would default within five years. CoreWeave shares fell as much as 11.91%, while other so-called neocloud companies with similar businesses also dropped sharply, with Nebius Group down 12.18%, IREN down 11.19% and Oracle down 4.64%.
Another drag on equities was a renewed spike in oil prices as military clashes continued in the Middle East and on the Ukrainian front. On the ICE Futures exchange in London, Brent crude for December delivery settled at $109.86 a barrel, up 3.72% from the previous session. That was the highest level since May 19. Brent briefly traded above $110 during the session.
On the New York Mercantile Exchange, West Texas Intermediate crude for November delivery also rose 3.51% to settle at $101.41 a barrel, the highest since Sept. 17. WTI has now risen for seven consecutive sessions.
Exports through the Strait of Hormuz fell to 9.4 million barrels a day between the 8th and the 14th, about 70% of the average before the war with Iran, according to shipping data provider Kpler. Yemen's pro-Iran Houthi rebels also launched attacks on the 16th against Yanbu, a key port city on Saudi Arabia's western coast and a hub for petrochemical facilities. Ukraine, meanwhile, has effectively abandoned the "energy truce" brokered by U.S. President Donald Trump and resumed strikes on Russian refineries. Hurricane Isaias also disrupted crude production along the Gulf of Mexico, cutting U.S. commercial crude inventories by more than 8 million barrels.
