U.S. CPI slightly exceeds expectations; interest rate concerns trigger widespread selling in tech stocks.
CoreWeave plunges 15%, corporate bonds fall to 77 cents; market fears over AI data center funding intensify.
Key Market Developments
① CPI beats expectations; rate pressure hits tech sector
The U.S. Consumer Price Index (CPI) for September rose 0.6% month-on-month and 3.7% year-on-year, exceeding market expectations by 0.1 percentage points.
Core CPI increased 0.3% month-on-month and 2.6% year-on-year.
The monthly headline CPI saw its sharpest rise in five months, largely driven by surging energy prices.
Gasoline prices jumped 34.2% year-on-year, contributing to approximately half of the monthly CPI increase.
Market sentiment remains divided: some analysts argue the deviation from expectations is too marginal to sway the October FOMC decision, while others warn of the potential for energy-driven inflation to become entrenched.
Treasury yields spiked immediately following the CPI release before retreating on safe-haven demand as equities declined, with the 10-year yield settling at 5.19%.
② CoreWeave slumps 15%; focus shifts from AI investment to financing hurdles
Shares of AI data center firm CoreWeave plummeted 15% amid concerns over its financial health.
Corporate bonds due in 2032 fell to 77 cents on the dollar (TRACE data), fueling anxieties over rising capital costs.
CoreWeave’s interest expenses surged to $640 million in the second quarter from $270 million a year earlier, while total debt expanded from $15 billion a year ago to $52 billion by the end of June.
Investors are increasingly questioning whether the company's profitability can sustain the massive debt load required for its aggressive data center expansion.
Related stocks, including Oracle and Nebius, also trended lower.
CoreWeave maintains that this is a temporary phenomenon preceding the full-scale operation of its data centers and insists there are no fundamental issues with its business model, client base, or execution capabilities.
③ Semiconductors remain weak as capital rotates to defensive plays
The confluence of CoreWeave-related fears and interest rate pressures triggered a sell-off in major semiconductor stocks.
ASML declined following disappointing third-quarter sales revenue, despite raising its full-year guidance.
The company reaffirmed its long-term growth outlook, noting that clients are already placing inquiries for equipment supply for 2029–2030.
SK hynix ADRs also fell below their offering price.
Conversely, defensive sectors—including pharmaceuticals, energy, and consumer staples—saw gains.
Moderna, Eli Lilly, and Gilead Sciences outperformed, while Berkshire Hathaway extended its winning streak to 10 consecutive trading sessions.
Market Analyst Perspective
The domestic equity market has recently exhibited higher volatility than the U.S. markets. In the U.S., capital often rotates into neglected sectors when tech stocks retreat; however, in Korea, the broader index tends to stumble whenever Samsung Electronics and SK hynix decline.
The current downturn is driven more by interest rates and oil prices than by corporate earnings. When these two indicators rise, the relative attractiveness of the Korean market diminishes for foreign investors, leading to selling pressure on large-cap stocks. Indeed, recent foreign outflows have been concentrated in these market leaders.
The CoreWeave situation is less a signal that AI demand has stalled, and more a sign of growing caution regarding the financing and profitability of large-scale data center investments. Corporate earnings remain above market expectations, and there has been no discernible change in long-term AI investment plans.
Domestically, margin-related selling is a mounting burden. With the index lingering near or below break-even points, there is a risk that volatility will intensify toward the end of the session as investors look to liquidate holdings to avoid forced sales (margin calls). As an increasing number of stocks have seen declines regardless of their actual performance, it is crucial to focus on individual stock trends, particularly within existing sector leaders and policy-driven investment themes.
Today’s Checkpoints
Flows: Foreign selling intensity following the -4.04% move in the MSCI Korea Index and -2.89% in overnight futures.
Semiconductors: Impact of CoreWeave’s financial concerns on domestic chipmakers like Samsung Electronics and SK hynix.
Interest Rates: Movements in the U.S. 10-year Treasury yield, which spiked after the CPI release before cooling to 5.19%.
Oil Prices: Brent/WTI hovering near the $95 mark following reports of a vessel attack in the Strait of Hormuz.
Margin Debt: Potential for late-session forced liquidations (margin calls).
Key Indicators
Dollar Index: 102.53 (+0.35%)
Crude Oil: $95.09 (+1.01%)
Volatility Index (VIX): 16.87 (+10.48%)
U.S. 10-Year Treasury Yield: 5.19%
MSCI Korea Index: -4.04%
Overnight Futures: -2.89%
Source: Sijangman’s Stock Story (t.me/shmstory)
YouTube: Sijangman TV www.youtube.com/@blueoak1004
This article has been reconstructed from "Sijangman’s Stock Story" Telegram posts with the author’s consent. All content may contain errors and does not constitute a recommendation to buy or sell; it should not be used as the basis for investment decisions. The content of this post cannot be used as legal evidence under any circumstances.
