Sentiment in mid-week trading worsened after the Bureau of Labor Statistics reported inflation figures.
The BLS reported the U.S. Consumer Price Index increased by 0.6% M/M last month. The index for gasoline led the increase, rising by 9.1% M/M. In the last 12 months, the CPI rose by 3.7%. At first, Treasury bond yields rose but ended slightly lower on the day.
Technology investors panicked by selling three high-flying stocks.
Ciena (CIEN) shares dropped by 10.19% to close below $360. That extended its drop that began on October 12. Investors are wary of holding downstream AI suppliers. As worries increase that the build-out of data centers is lagging compute demand, Ciena’s growth rate might slow down.
Dell Technologies (DELL) closed down 11.27%, adding to its drop on Oct. 13. Barclays downgraded Dell’s stock rating to equal weight from overweight. Server suppliers like HP Inc. (HPQ), Hewlett Packard Enterprise (HPE), and Super Micro Computer (SMCI) also declined.
CoreWeave (CRWV) dropped by 15.46% while Nebius Group (NBIS) stock lost 10%. Gartner (IT), itself facing competition from AI, predicted that 80% of neoclouds will not operate independently by 2030. Gartner assumed that spending would continue at its current pace.
Your Takeaway
Market panic is the main reason for the aforementioned stocks dropping by 10% or more.
