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Markets

AI Infrastructure Stocks Tumble as Hot CPI Lifts Rate-Hike Odds

AI infrastructure and chip stocks fell Wednesday as hotter September inflation data raised the odds of an October rate hike.

AI News Feed · 2026-10-15 05:46

The September consumer price index rose 3.7% year over year, while the core rate excluding food and energy increased 2.6%, CNBC reported. On a month-over-month seasonally adjusted basis, headline CPI rose 0.6%, with more than half of the all-items increase tied to a 9.1% gain in gasoline. CNBC said the reading illustrated inflationary pressure from the ongoing conflict in the Middle East, particularly through higher energy prices. The Nasdaq was down 2% in late-afternoon trading and the S&P 500 had dropped more than 1%. Bond prices initially sold off, sending yields sharply higher, before yields reversed slightly into the red later in the day.

Traders increased the market-implied odds of a 25-basis-point rate hike at the October meeting to roughly 37%, according to the CME FedWatch tool cited by CNBC. That was up from 22% on Tuesday and about 18% one week earlier. The prospect of more rate hikes weighed on economically sensitive sectors, with investors rotating into healthcare and consumer staples and out of banks and industrials. Technology stocks were also hit. CNBC's Investing Club said the rate outlook played into its decision earlier in the day to exit Honeywell Technologies and build some cash.

AI infrastructure names could face a slow patch if the cost of capital rises too quickly, CNBC reported. GE Vernova and Eaton were among the biggest laggards in the Investing Club portfolio Wednesday. Broadcom CEO Hock Tan warned Monday at a conference in Singapore that access to capital could become the next industry constraint, according to the report.

Semiconductor shares remained a major source of market pain. The iShares Semiconductor ETF, or SOXX, fell another 4% on Wednesday, extending its losing streak to seven consecutive sessions and bringing its total decline over that stretch to nearly 12%. CNBC said this was the worst SOXX losing streak since May 2025; the last time the ETF fell for eight sessions in a row was September 2015.

Anthropic is expected to share updated financials with a group of institutional investors on Wednesday, CNBC reported. No numbers had leaked yet, but the market action suggested to the Investing Club that there could be some disappointment. If Anthropic reports better-than-expected financials, that could take some pressure off chip stocks and other AI infrastructure-related names, CNBC said.

In analyst news, Truist initiated coverage of Qnity with a buy rating and a $170-per-share price target, implying 38% upside to Tuesday's closing price of just under $123 per share. The analysts said the $25 billion market-cap company's array of materials for chip manufacturing and packaging was supportive of durable above-market growth. The call followed a Barclays initiation on Monday with a $211 price target; Barclays also started Qnity with a buy rating alongside several other U.S. chemical companies, including DuPont and Linde. Qnity has fallen about 8% since the end of July and 31% from its June high, and it often trades with semiconductor capital equipment stocks such as Applied Materials and Lam Research. CNBC noted the Investing Club portfolio has plenty of semiconductor exposure through Nvidia, Intel, Micron and Broadcom.

No major earnings were due after the bell, CNBC said. On Thursday morning, Bank of New York was scheduled to report, with Taiwan Semiconductor Manufacturing, Schwab and Prologis also due. On the data side, Thursday was expected to bring September retail sales and the September producer price index, the second part of the government's inflation series.