US stock futures weaken as inflation concerns, rising AI investment costs and fears over technology valuations unsettle global markets.

Wall Street is heading into another volatile session on Thursday, October 15, as a global sell-off in artificial intelligence (AI) and semiconductor stocks adds to pressure following stronger-than-expected US inflation data.

Nasdaq futures fell approximately 1.3% in early Thursday trading, signalling the potential for further weakness in technology shares when US markets open. The move followed Wednesday's sharp decline, when the Nasdaq Composite lost 1.9%, the S&P 500 fell 1.1% and the Dow Jones Industrial Average slipped 0.1%. The S&P 500 and Nasdaq recorded their steepest daily losses since July.

Hot Inflation Raises Interest-Rate Concerns

The latest US Consumer Price Index (CPI) report showed annual inflation accelerating to 3.7% in September, above economists' expectations of 3.6%. Higher gasoline prices contributed to the increase, reinforcing concerns that inflation could remain elevated and complicate the Federal Reserve's efforts to bring it back to its 2% target.

The data initially pushed Treasury yields higher as investors reassessed the outlook for monetary policy. Higher interest rates can increase borrowing costs for businesses and reduce the present value of future corporate earnings, putting particular pressure on growth-oriented technology companies.

However, the bond market reversed direction on Thursday. The benchmark 10-year US Treasury yield fell to approximately 5.10% as investors moved toward safer assets amid the widening technology sell-off. This suggests that concerns about market risk are now competing with expectations of tighter monetary policy.

AI Stocks Face Growing Valuation Pressure

The technology sell-off extends beyond concerns about inflation. Investors are increasingly questioning whether the expected returns from massive AI infrastructure investments will justify their costs.

On Wednesday, data-centre operator CoreWeave fell 16%, AI infrastructure provider Nebius declined 11%, Oracle dropped 9% and Dell Technologies lost 11%. Together, these declines erased approximately $80 billion in market value.

Concerns are particularly acute for companies financing expensive data centres and computing infrastructure through substantial borrowing. Higher financing costs can weaken profitability, especially when the revenue generated by these investments takes years to materialise.

The pressure spread across Asia on Thursday. South Korea's Kospi plunged approximately 8%, while Japan's Nikkei 225 fell around 5%, as semiconductor and AI-related shares suffered heavy losses. The declines highlighted how closely global technology markets have become linked to expectations for AI demand, chip earnings and financing conditions.

What Investors Should Watch

Attention now turns to upcoming US producer-price inflation and retail-sales data, alongside comments from Federal Reserve officials. These developments could influence interest-rate expectations and determine whether selling pressure spreads beyond technology stocks.

Trader Takeaway: The near-term outlook for US equities remains cautious, with AI and semiconductor stocks vulnerable to further volatility. Investors should monitor Nasdaq futures, Treasury yields and corporate earnings for signs of stabilisation. A recovery in technology shares may depend on improving confidence in AI profitability, while persistent inflation and expensive financing could prolong the correction.