US stock markets declined sharply on Wednesday following inflation data that exceeded economist expectations, with Bitcoin mining companies among the hardest hit equities.
The S&P 500 fell 1.1%, marking its largest single-day decline since July 29. The Nasdaq Composite dropped 1.9%, its worst day since July 23, while the Dow Jones Industrial Average declined 0.1%.
US consumer prices rose 3.7% in September year-over-year, surpassing the 3.6% forecast and significantly above the Federal Reserve's 2% target. The increase was attributed partly to higher gasoline prices related to Middle East tensions.
Mining companies with exposure to AI infrastructure were particularly affected. TeraWulf fell 12.64%, while Core Scientific, Cipher Mining and IREN declined 12.44%, 12.35% and 12.2% respectively. Riot Platforms, Bitdeer Technologies, MARA and CleanSpark also posted losses.
Across 23 AI infrastructure stocks tracked by PRISM's AI Data Center and Infrastructure Index, 21 declined Wednesday with an average loss of 7.46%. Data center operator CoreWeave fell 16%, AI infrastructure provider Nebius fell 11%, and Oracle declined 9%.
Market analysts cited concern that higher interest rates could increase borrowing costs for AI infrastructure companies, many of which rely heavily on debt financing for data center expansion.
The inflation report heightened expectations of a Federal Reserve rate increase in October, with implied probability briefly exceeding 50% before retreating. San Francisco Federal Reserve President Mary Daly stated that while further rate hikes would likely be needed to control inflation, there was no urgency to act immediately.
