AI Stocks Sink as Inflation Hits 3.7% — But Chip Demand Is Still Strong

U.S. inflation accelerated to 3.7% in September, sending the Nasdaq sharply lower and raising the financing hurdle for AI infrastructure. Yet ASML reported record quarterly sales and strong chipmaking equipment demand. Why can AI business fundamentals remain strong while AI stocks fall? In today’s Clear Markets, we connect the CPI report, Treasury yields, CoreWeave and Oracle’s selloff, ASML’s earnings, and the latest U.S. bank results to explain the difference between real demand and investment returns. We also preview Thursday’s producer-price data and TSMC earnings.

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Key Takeaways
• September U.S. CPI rose 0.6% month over month and 3.7% year over year, versus 3.4% annual inflation in August; gasoline rose 9.1% in the month.
• The Nasdaq fell 1.88%, S&P 500 fell 1.11%, and the semiconductor index lost 4.3%; the Dow fell just 0.09%.
• Interest-rate futures priced roughly a 37% probability of an October Fed increase after the report, up from 22% Tuesday; a pause still remained the more likely outcome.
• Debt-sensitive AI names sold off, while ASML reported €11.7 billion of quarterly sales and a 57.5% gross margin, demonstrating continuing equipment demand.
• Bank of America reported $6.9 billion net income after a $1.2 billion regulatory charge; Morgan Stanley reported $20.3 billion net revenue and $3.03 diluted EPS.
• Watch October 15 U.S. PPI and TSMC’s full earnings for evidence on cost pressure and advanced-chip profitability.