AI funding concerns weigh on Australian tech stocks
CRWV•Australian equities rose 0.9% last week as investors rotated into financials, healthcare and consumer staples, while the S&P/ASX Small Ordinaries fell 2.8%. CoreWeave shares dropped around 25%, and its 2031 bond yield rose above 15%.
1. Market divergence
The S&P/ASX 300 rose 0.9% last week, while large caps gained 1.5% and the S&P/ASX Small Ordinaries fell 2.8%. Investors rotated into financials, healthcare and consumer staples as concerns over capital availability and financing costs pressured AI-linked stocks.
2. Funding concerns
CoreWeave shares fell around 25%, and the yield to maturity on its 2031 bond rose above 15%, underscoring funding stress.
3. Rate expectations
Weaker Australian employment data pushed back rate-hike expectations. Markets priced a 22% chance of an increase at the Melbourne Cup meeting.
