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Samsung Auto Blocker Shields Galaxy Phones From Risky Apps, but Sideloading Gets HarderResearchers say ad-served zero-click spyware infected at least 45 Al Jazeera devicesAnbernic prices RG DDS at $299.99, nearly double the original 3DSGoogle Maps Street View blurs some locations permanently, Engadget reportsEmber Launches Mug 3 With On-Mug Temperature Controls, New Tumbler 2AI Selloff and Hot Inflation Hit Stocks; Dow Gains on Rotation
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AI Selloff and Hot Inflation Hit Stocks; Dow Gains on Rotation

AI stocks slid and hot inflation rattled markets; the Dow rose as investors rotated beyond tech, CNBC reported.

AI News Feed · 2026-10-18 01:41

The sell-off accelerated on Wednesday after September consumer price data showed inflation rising 3.7% from a year earlier, above the 3.6% expected by economists, CNBC reported. Core inflation was also slightly hotter than anticipated. Producer prices offered little relief on Thursday, jumping 1.3% for the month and 6.3% annually, the biggest monthly and annual gains since December 2022 and March 2022, respectively.

Higher inflation, fueled partly by elevated oil prices, threatens to raise borrowing costs and complicate the massive buildout of AI infrastructure, according to the report. Broadcom CEO Hock Tan warned on Monday that access to capital could become the industry's next major constraint. Solid bank earnings and the rotation beyond technology gave some support to the market.

Within tech, the AI trade took another hit as investors grew concerned about rising borrowing costs and competition in semiconductors, CNBC reported. Memory stocks including Micron, SanDisk, Western Digital and Seagate fell after Chinese rival CXMT announced progress on a more efficient chip structure, raising fears of increased competition and a potential supply glut.

The iShares Semiconductor ETF extended its losing streak to nine straight sessions, its longest in more than a decade, while the VanEck Semiconductor ETF fell 10% for the week, its worst since July, according to the report. Concerns that technology companies are borrowing too much for the AI buildout sent neoclouds such as CoreWeave, whose total debt has risen above $51 billion, down 25% last week. CoreWeave corporate bond yields and credit default swaps also jumped.

Cybersecurity stocks were among the weakest. Palo Alto Networks and CrowdStrike lost more than 18% and 17%, respectively, for the week, CNBC reported. Reports that OpenAI is in early talks to buy Trail of Bits hurt the sector; such an acquisition would expand OpenAI's cybersecurity ambitions. The cyber stocks were also caught in the AI trade crossfire as investors moved into defensive names.

Kimberly-Clark and Eli Lilly emerged as some of the portfolio's best performers as investors rotated out of AI, CNBC's investing club said. The club added to Kimberly-Clark on Tuesday as its Kenvue acquisition moved closer to completion, exited its remaining Honeywell Technologies position on Wednesday to replenish cash, trimmed Cardinal Health on Thursday to lock in profits after a recent rally and bought more Bank of New York following strong earnings.

Not every technology stock fell. Meta Platforms rallied after releasing new AI models, Muse Wonder and the more advanced Muse Wonder Full, on Monday; Wells Fargo said the models rank among the industry's best, behind only Anthropic's Claude Opus 5.5, according to CNBC. The launch could attract more paying users and create revenue beyond advertising. Microsoft closed at a record high on Tuesday for the first time in nearly a year, recovering from a more than one-third plunge on concerns about AI spending and Copilot's competitiveness.