Nasdaq’s Worst Week Since June Left Energy Ahead

The Nasdaq Composite fell 4.5% for the week ended Oct. 16, its worst stretch since June, while the Dow Jones Industrial Average rose 0.7%. On Friday the tech-heavy index dropped 2.1% to 26,140.03. Chipmakers and AI infrastructure names sold off as West Texas Intermediate crude settled at $101.41.

The S&P 500 lost 1.09% to 7,659.44 and finished the week down 1.9%. South Korea’s Kospi, loaded with Samsung Electronics and SK hynix, fell 14.5% for the week, its steepest drop since October 2008.

The Nasdaq’s 4.5 Percent Week

Friday’s close left both the S&P 500 and the Nasdaq Composite below their 50-day moving averages. The Nasdaq 100, which holds the largest non-financial names, dropped 2.50% to 29,187.55 and lost 5.49% for the week. The Russell 2000 of smaller companies fell 1.7% to 2,721.37 and was down 3% on the week.

Five of the 11 S&P 500 sectors still finished higher. Energy gained 2.1% and utilities 1.2%. Communication services fell 2.7%, information technology 2.4%, and consumer discretionary 1.5%. About 280 stocks in the S&P 500 declined and 222 advanced, so the index loss sat in a handful of groups rather than in a full washout.

THE WEEK ENDED OCT. 16

The Cboe Volatility Index closed at 19.99, up 3.53 points, or 21.45%, after a session high of 22.31. That high was the first print above 22 in four months. The close was the highest since July 29. The 10-year Treasury yield sat near 5.09%.

For the year the S&P 500 is still up 11.9%, the Nasdaq about 12.5%, and the Dow 8.2%. The week snapped a four-week winning run in the Nasdaq and handed the average its weakest five sessions since June, even as energy stocks and the Dow took the other side of the same tape.

Seoul Halted Trading for 20 Minutes

The U.S. loss looks modest next to Seoul. The Kospi fell 14.5% for the week, worse than any week in the March 2020 crash and the worst since a 20.5% drop in October 2008 after Lehman Brothers failed. SK hynix lost 24.3% on the week and Samsung Electronics 17.8%. The two names are the core of Korea’s AI hardware trade and, on Thursday’s close, about 47% of Kospi market value.

SEOUL’S WEEK IN THE CHIP ROUT

1. June 22: The Kospi records a closing high of 9,114.55 after a first-half surge that made Korea the world’s best major stock market.
2. Oct. 15: The index drops 7.57% to 5,554.22, hits 5,450.81 in the session, and halts for 20 minutes after a circuit breaker at 12:38 p.m. SK hynix falls 11.06% to 1.26 million won and Samsung 9.48% to 210,000 won. Foreign investors sell 3.62 trillion won ($2.68 billion).
3. Oct. 16: The Kospi bounces 2.05% to 5,668.05, still 37.8% below that June close and up 34.5% on the year.

A sell-sidecar at 9:07 a.m. Thursday had already frozen sell orders in index-futures program trading. The Kosdaq also tripped a breaker, the first time both boards had halted on the same day since July 29. The won traded as weak as 1,353 per dollar before finishing at 1,343.18.

“Volatility is expected to persist in the near term,” said Kim Seok-hwan, an analyst at Mirae Asset Securities. He said local supply and demand had deteriorated, leaving the market more sensitive to outside shocks. Foreign selling in October had already run into the billions of dollars before Thursday’s dump, and buybacks that had supported Samsung and SK hynix since August were winding down.

That is the cost of an index that rode high-bandwidth memory into Nvidia’s accelerators and then had nowhere else to hide. U.S. coverage treated a 4.5% Nasdaq week as the event. The bear market in Seoul, 37.8% down from the June close, is where the same AI trade actually broke.

How CoreWeave Debt Repriced the AI Trade

The U.S. name that transmitted the scare was CoreWeave, the Nvidia-backed cloud firm that rents GPU capacity. Shares fell about 12% Friday and 25% for the week. LSEG data put total debt near $50 billion. Yields on junk bonds due in 2031 and 2032 climbed to around 15%, a distressed zone, and the cost of insuring that debt ran near 1,000 basis points, implying about a 63% chance of default within five years.

THE COREWEAVE BALANCE SHEET

• The debt: About $50 billion in total obligations, per LSEG, after principal of $35.1 billion at June 30, up from $21.4 billion at the end of 2025.
• The spend: Annual capital spending was raised in August to $35 billion to $39 billion, against expected revenue near $13 billion and a projected loss of $2.13 billion this year.
• The backlog: CEO Mike Intrator told staff a $104.2 billion revenue backlog at the end of the second quarter, plus more than $25 billion of new commitments early in the third, more than covers the debt.
• The backstop: Nvidia has agreed to buy unsold CoreWeave capacity through April 13, 2032. Nvidia chief Jensen Huang said the firm’s finances are improving and he sees no need to backstop it further.

Max Frumes, global head of distressed and leveraged finance at 9fin, called CoreWeave “absolutely the canary in the coal mine” for a slice of the market that is coming under more stress. Bonds issued in June at 9.675% were the paper that moved first. Equity followed, and so did other neoclouds. Nebius and IREN were dragged with it. The question the credit market asked is whether data-center operators can fund expansion and still service the loans, not whether AI demand exists.

Michael Rosen, chief investment officer at Angeles, put the systemic worry on the table and then pulled it back. “The question is: Is this a systemic issue?” he said. “Obviously, increased debt issuance is something to observe and continue to watch and be concerned about if it continues to get to levels of excessiveness. But we’re not remotely close to that right now.”

Private credit built a large share of that stack: a $2.3 billion GPU-backed facility in 2023, $7.5 billion in 2024, and an $8.5 billion facility in March anchored by Blackstone Credit & Insurance. Carlyle has said private credit could be asked to fund about $1 trillion of the AI-compute buildout. Dan Ives, the Wedbush analyst, has said as much as 10% of planned AI projects may never be built. Friday’s tape treated the highly indebted end of that chain as the place to sell first.

Energy Collected the $101 Oil Shock

The other side of the same session was crude. West Texas Intermediate futures rose 3.5%, or $3.44, to settle at $101.41 a barrel, the highest close since Sept. 17, and gained 10.4% on the week. Brent rose 3.7%, or $3.94, to $109.86, the highest since May 19, and was up 4.9% for the week. Energy stocks and Chevron helped keep the Dow’s Friday loss to 175.28 points, or 0.34%, and left the average up 0.7% for the week.

WHAT LIFTED CRUDE ON FRIDAY

• Hormuz attacks: Ship-tracking firm Kpler put average oil flows through the Strait of Hormuz at 11.62 million barrels a day in the week to Oct. 13, against a 17.15 million baseline, after Iran stepped up strikes on tankers in reply to a U.S. port blockade and tighter sanctions.

Yanbu missile: A Saudi-led coalition said it destroyed a ballistic missile headed toward the Red Sea city of Yanbu, a port used to move Saudi crude without using Hormuz. Early reports pointed to no damage to the terminal.

• Russian diesel: Ukraine vowed to keep hitting Russian refineries after an energy-site ceasefire came apart, adding a product-supply scare on top of the crude one.

ING commodity strategists Warren Patterson and Ewa Manthey said the market was “pricing in a significant risk premium” on Middle East security and the durability of Hormuz flows. Energy Aspects said WTI and Brent reversed earlier losses as escalation fears returned, including unverified talk of a possible Iranian strike on Saudi energy kit. The United States offered 17 million barrels from the emergency reserve for exchange, which did not cap the late rally.

That oil move is why the Dow and the Nasdaq stopped telling the same story. A 10.4% weekly jump in WTI feeds energy earnings and also feeds the inflation prints that make leveraged AI builders more expensive to refinance. The winners collected the price. The losers collected the rate fear that came with it.

The Chip Slide’s Eighth Straight Session

Semiconductors did the damage inside the U.S. indexes. The VanEck Semiconductor ETF lost 3% Friday and 10% for the week, its largest weekly drop since April 2025. The PHLX Semiconductor Index fell 3.83% for an eighth straight decline. Micron Technology dropped 5.6% and Intel 5.8%. Advanced Micro Devices and Sandisk were among the names that led the ETF lower, and jitters about competition from China ran through the group all week.

Memory was the weak link on both sides of the Pacific. Roundhill’s Memory ETF sank another 5.5% Friday after a double-digit retreat in the first four sessions, pulled by Western Digital, Sandisk, Micron and Seagate. SK hynix’s U.S. receipt fell 5.68%. A U.S. chip gauge had already erased about $1.6 trillion of market value across a six-session losing streak, even after Samsung and ASML posted results that failed to steady the tape.

Software was not spared. The iShares Expanded Tech-Software ETF fell 4.80% Friday. The week also extended a broader exit from crowded AI trades that had already hit Korea’s memory giants harder than Nvidia, which slipped 1.17% to $214.70. The pattern is familiar from other late-cycle squeezes: the most leveraged and most index-heavy expressions of a theme go first, and the cash-rich platform names go last.

Bank of America strategist Michael Hartnett listed the AI price action as one of four reasons the firm is taking a “risk-off” stance for the next month, alongside higher yields, elevated oil from the Middle East and Ukraine wars, and political risk around the midterms. That is a bet against the same names that just had their worst week since June.

Pricing an October Hold After Bangkok

Hot inflation was the fuse under both the chip selloff and the oil spike. The Bureau of Labor Statistics said the Producer Price Index for final demand rose 1.3% in September, with the 12-month gain at 6.3%, the largest 12-month rise since December 2022. Energy prices in that goods basket jumped 10.8% on the month and accounted for more than 80% of the goods increase. Consumer prices rose 0.6% in September and 3.7% over the year, with the core index up 2.6%. The economy added 29,000 jobs.

Those prints revived talk of another Federal Reserve increase at the Oct. 27-28 meeting. Chair Kevin Warsh, in a discussion with IMF Managing Director Kristalina Georgieva at the Fund’s annual meetings in Bangkok, refused to preview it. The Fed had already lifted the funds rate in September by a quarter point to a 3.75% to 4% range, the first increase in three years, after Warsh took the chair in May.

I don’t prejudge meetings. I don’t believe in saying now what I might do at the meetings that we have in the balance of this year.

Kevin Warsh, Federal Reserve Chair, IMF and World Bank annual meetings in Bangkok

He said the Fed would “deliver price stability” and had “removed a dose of accommodation about a month ago.” He also called the AI investment wave a demand shock that is putting upward pressure on prices even as it supports growth. Traders read the silence as a pause. The CME Group’s FedWatch tool, which turns fed-funds futures into a futures-implied chance of a hold, pointed to an 82% probability the Fed leaves the overnight rate unchanged at that meeting.

Wells Fargo Investment Institute president Darrell Cronk said the firm still does not think investors are paid to extend duration, and that the cycle may not have seen its peak in rates. Hartnett’s desk, by contrast, is positioned for a hike on Oct. 28. The market that just dumped CoreWeave and SK hynix is the one that also decided Warsh’s non-answer was enough to keep October on hold and leave the fight for December.

Tesla, Meta Platforms and Procter & Gamble report next week, which will test whether the cash-rich end of the AI complex can hold while the leveraged end keeps slipping. Until those prints land, the week’s verdict is already on the board: $101 oil paid energy and the Dow, 15% yields punished the AI borrowers, and a 14.5% Kospi week showed who had the most riding on memory chips.

Disclaimer: This article is news reporting and analysis of market moves for information only. It is not investment advice, a recommendation to buy or sell any index, stock, bond, commodity or fund, or a forecast of Federal Reserve policy. Readers should consult a licensed financial adviser or investment professional who can weigh their own holdings, time horizon and risk limits before acting. Index levels, oil prices, yields, inflation readings and policy odds reflect the sources cited as of the dates in this piece and can change in the next session.