S&P 500, Nasdaq post worst day since July as AI trade falters

The AI trade had its worst day in months, and inflation was holding the knife. On October 14, 2026, the S&P 500 fell 1.1% and the Nasdaq composite dropped 1.9%. That was the worst session for both indexes since July, and AI stocks led the retreat. The trigger was a September Consumer Price Index reading that came in hotter than Wall Street wanted. For a market that has leaned heavily on the AI growth story, that combination proved uncomfortable. A CPI print that spooked the room Consumer prices rose 0.6% month-over-month in September. On a year-over-year basis, the CPI climbed 3.7%, edging past the consensus estimate of 3.6%. The overshoot revived worries that the Federal Reserve could respond with interest rate hikes. Higher rates are bad news for most stocks, but they hit hardest where companies spend enormous sums up front and wait years for the payoff. AI infrastructure fits that description almost perfectly. Building data centers and buying chips at scale requires heavy capital expenditure, and a lot of that spending depends on borrowed money. Chipmakers and cloud builders take the hit The selloff concentrated in the names most closely tied to AI buildout. Nvidia and Broad...