CoreWeave Inc (CRWV -12.10%) stock is down on Tuesday, falling 11.8% as of 2:05 p.m. ET. The S&P 500 and the Nasdaq Composite are down 0.6% and 1.4%, respectively.
President Trump said Tuesday that talks with Iran are not underway, walking back earlier claims that negotiations were in progress. That's spiking fear in the market.
NASDAQ: CRWV
Key Data Points
Why CoreWeave stock is dropping today
In a Truth Social post on Tuesday, Trump said there were "no talks or conversations going on, or scheduled, with the Islamic Republic of Iran."
The war has sent oil prices soaring. And while they're down from their peak earlier in the war, they've been climbing in the last week and remain roughly 30% above pre-war levels.
Image source: Getty Images.
That's compounding an already tough inflation picture for the Fed, and bond yields have climbed right along with oil -- the 30-year Treasury rate is now at its highest point in almost 20 years. subhead
CoreWeave's heavy debt load adds to the risk
When the macro picture looks like this, it often leads to traders selling out of high-growth, high-risk stocks, especially those carrying loads of debt and trading at extreme multiples.
Both can be said about CoreWeave. The company is heavily leveraged -- its debt-to-equity ratio is more than 14 and continues to climb -- and its stock is certainly pricey. I would avoid it.
