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AI sector faces credit stress and market pullback
Investors' optimism in AI wanes as CoreWeave faces rising credit stress, with its 9.75% bond yield hitting 15.78% and CDS spreads over 1,140 bps. AI and semiconductor stocks shed over $1 trillion this week, with Nvidia down 1.84%, AMD 1.5%, Intel 2.8%, and Dell 6.8%. Nvidia CEO Jensen Huang warned of AI safety risks. Meanwhile, TSMC posted a record quarter, forecasting 58% higher Q4 revenue. US producer prices rose 6.3% YoY, the fastest since Dec 2022, adding inflation pressure. Netflix announced chief content officer Bela Bajaria will be replaced by Peter Rice on Oct 26.