TeraWulf Shares Fall as Inflation Concerns Weigh on Growth Stocks

TeraWulf Inc. shares moved lower on Tuesday, as AI cloud services stocks broadly declined, with rising inflation concerns and a surge in bond yields dampening investor appetite for high-growth companies that rely heavily on borrowed capital to fund customer-driven capital expenditures.

TeraWulf shares slid. Why is WULF stock falling?

Rising Oil Prices and Bond Yields Squeeze Growth Stocks

Oil prices spiked overnight after the Trump administration allowed a temporary ceasefire agreement with Iran to expire rather than extend it, prompting Tehran to threaten a more aggressive military response. Traders interpreted this as a signal that shipments through the Strait of Hormuz could face fresh disruptions, fueling concerns that energy-driven inflation could reaccelerate.

This matters for stocks like TeraWulf because the factors are interconnected. When energy prices rise, inflation tends to run higher, making it harder for the Federal Reserve to justify rate cuts. The bond market picked up on this risk almost immediately on Tuesday, pushing the 10-year Treasury yield to 4.74% and the 2-year yield to 4.19%.

Higher bond yields hit AI infrastructure stocks particularly hard for two reasons. First, valuations for companies like TeraWulf are largely based on investor expectations of profits years down the line, and rising yields make those future profits worth less in today's dollars, as investors can now earn more simply by holding bonds.

Second, a large portion of the industry's growth is tied to customer capital expenditures financed through borrowing, so when borrowing costs rise as they have this week, financing those expenditures becomes more expensive, which could slow the demand these companies are counting on for growth.

When borrowing costs rise as they have this week, financing capital expenditures becomes more expensive, which could slow the demand these companies are counting on for growth.

TeraWulf's Chart Shows Stock Still Battling a Downtrend

TeraWulf shares are trading well below key trend lines watched by long-term investors, roughly 10.7% below the 20-day moving average, about 26.5% below the 50-day moving average, and approximately 11.6% below the 200-day moving average. When a stock sits far below its primary moving averages, rallies tend to face more resistance than usual, as ample overhead supply comes from investors looking to sell into any bounce.

The 20-day moving average below the 50-day moving average points to weak momentum over the past few months, but the 50-day still holding above the 200-day suggests the stock's long-term uptrend has been dented rather than fully broken. Simply put, the bigger trend is not dead yet, but the medium-term picture still needs repair.

The MACD has crossed above its own signal line and now reads positive in its histogram. Read together, this combination typically points to selling momentum fading rather than confirming that a new uptrend has truly formed.

Two price levels stand out for traders watching what happens next. To the upside, the $17.50 area is one to watch, as it overlaps with the 20-day and 200-day moving averages and could act as a ceiling if the stock tries to move higher. To the downside, if selling pressure intensifies again, $14.50 is the most likely zone to attract buyers back.

Zooming out, TeraWulf peaked in June, which also marked its 52-week high, before setting a swing low in July, meaning the stock's recent action looks more like an early attempt to stabilize after that peak rather than a genuine return to an uptrend.

WULF Shares Slide

WULF price action: TeraWulf shares fell 11.42% to $15.60 at the time of publication on Tuesday.