Shares in AI data centre infrastructure company CoreWeave fell 3.6% after plunging 15.5% on Wednesday.
The company is a big client of Nvidia chips and Nvidia is a major shareholder.
The Nasdaq Composite, which has the heaviest exposure to tech stocks, shed 0.3%.
The blue-chip Dow rose, however.
“Rotation out of highly speculative AI infrastructure into established sectors helped the Dow gain over half a percentage point,” said IG analyst Axel Rudolph.
European stock markets were more resilient, benefiting from their lower exposure to the tech sector.
Seoul and Tokyo bore the brunt of the selling in Asia as traders bailed out of chipmakers, tracking sharp losses on Wall Street on Wednesday.
Seoul’s Kospi dived more than 8% – leading to a brief trading halt – before slightly paring the losses, with semiconductor firm SK hynix sinking more than 11% and Samsung more than 9%.
Tokyo shed close to 5%, driven by sharp falls for Advantest, Kioxia and investment titan SoftBank.
“The tech sell-off has continued with pace, exacerbated by US inflation data which increased expectations for US interest rate hikes this month,” said Dan Coatsworth, head of markets at AJ Bell.
“US Treasury bond yields fell, suggesting that investors are moving into supposed lower-risk assets,” he added.
Markets, already struggling with concerns about the outlook for the AI investment boom, were stung after data released on Wednesday showed the US consumer price index jumped more than expected to 3.7% in September.
Figures released on Thursday showed US wholesale inflation surged past analysts’ expectations in September – the 6.3% increase from one year ago – marking its biggest year-on-year jump since 2022 as petrol prices rocketed because of the war with Iran.
The inflation figures put pressure on the Fed to raise rates at least once more following September’s hike.
The bank’s decision is due on October 28, a week before the US midterm elections.
Tech firms rely heavily on borrowing to fund their huge AI investments, meaning they are particularly sensitive to higher interest rates.
Saxo UK investor strategist Neil Wilson pointed to “worries about the AI buildout, bubbly valuations, lower-than-expected earnings growth at leading US frontier labs, Chinese competition” as additional factors behind the tech selling.
Key figures
New York – Dow: UP 1.0% at 52,124.81 points
New York – S&P 500: UP less than 0.1% at 7,725.39
New York – Nasdaq Composite: DOWN 0.3% at 26,604.01
London – FTSE 100: UP 1.1% at 10,840.35 (close)
Paris – CAC 40: UP 0.8% at 7,934.70 (close)
Frankfurt – DAX: UP 0.3% at 25,382.62 (close)
Seoul – Kospi: DOWN 7.6% to 5,554.22 (close)
Tokyo – Nikkei 225: DOWN 4.9% to 64,425.95 (close)
Hong Kong – Hang Seng Index: DOWN 1.0% at 24,062.72 (close)
Shanghai – Composite: DOWN 1.6% at 3,707.48 (close)
Brent North Sea crude: UP 0.3% at US$106.35 ($189.49) per barrel
West Texas Intermediate: UP 2.5% at US$97.50 per barrel
Euro/dollar: UP at US$1.1204 from US$1.1147 on Wednesday
Pound/dollar: UP at US$1.3248 from US$1.3189
Dollar/yen: DOWN at ¥158.16 from ¥158.37
Euro/pound: DOWN at 84.56 pence from 84.57 pence
– AFP