Stock markets declined sharply on Friday as traders moved away from technology equities due to fears that artificial intelligence-related firms are facing instability.

The Nasdaq Composite, focused on tech, dropped 573 points or 2.1 percent, finishing at 26,140 and marking its poorest performance since June. Meanwhile, the S&P 500 fell 1.1 percent and the Dow Jones Industrial Average slipped 0.3 percent.

Semiconductor makers and other technology companies faced pressure throughout the week as investors expressed concern over heavy borrowing tied to the rise of AI and the swift construction of numerous data centers needed to supply computing power for AI systems.

Emerging cloud providers such as CoreWeave, which deliver the intensive computing resources required for AI models, suffered notable losses. These firms rely heavily on debt and equity offerings to fund capital spending instead of operating cash flow, prompting worries about rising debt levels, according to market analyst Adam Crisafulli of Vital Knowledge.

CoreWeave shares dropped nearly 12 percent on Friday and about 24 percent for the week as investors monitor its growing debt load. Micron Technology declined 5.6 percent, Advanced Micro Devices fell 6 percent, Broadcom eased 4.5 percent and Intel lost 5.8 percent.

In other market action, Tesla shares slipped 2.1 percent after the electric vehicle maker introduced a new Roadster sports car seemingly able to lift itself into the air.

The Friday decline followed questions about whether AI firm Anthropic, preparing for a public listing, can sustain its revenue growth, Crisafulli noted. Investors now value Anthropic at around 1.5 trillion dollars, down from an earlier 2 trillion dollar target.

Inflation Trends Heading in the Wrong Direction

Investors were also unsettled this week by new data showing U.S. inflation rising and moving farther from the Federal Reserve 2 percent yearly goal.

Yields on 10-year U.S. Treasury bonds, a benchmark for mortgages, credit cards and other loans, stayed at 5.1 percent on Friday. Earlier this month, bond yields climbed to levels unseen in more than two decades amid inflation concerns and increasing government debt.

The latest inflation figures could prompt the Federal Reserve to increase interest rates at its upcoming meeting on Oct. 28-29, some economists said. Most traders currently expect the central bank to hold short-term rates steady, yet the chance of a hike at the December meeting has risen to 74.3 percent from 50.2 percent a month earlier, based on CME FedWatch data.

On Friday, Fed Chairman Kevin Warsh gave no signals on possible rate moves during a financial leaders meeting in Bangkok. The Fed raised rates at its September meeting, lifting the federal funds rate to a range of 3.75 percent to 4 percent, the highest since December 2025.

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