360Wall Street has its worst day since June as AI worries grow
US stocks had their worst day since June on Friday, 30 October. The S&P 500 fell 1.8% and the tech-heavy Nasdaq about 2.9%, led by chipmakers including Nvidia. Investors are asking whether hundreds of billions of dollars spent on artificial intelligence will pay off. The market is still only about 3.4% below its record high.
Wall Street had its worst day since June on Friday, 30 October, as a sell-off in technology shares deepened.
The S&P 500 fell 1.8% and ended a third straight losing week. The Dow Jones Industrial Average lost 572.25 points to close at 51,770.31, and the Nasdaq composite dropped 747.73 points, about 2.9%, to 25,437.00.
Chipmakers led the fall. Nvidia, the most valuable maker of AI chips, lost 4.2% and did more than any other company to pull the S&P 500 down. Intel fell sharply after giving a profit forecast below what analysts expected. A day earlier, Alphabet, Google's parent company, dropped more than 12% after saying it had burned more cash over the summer than in the spring.
Behind the selling is a question investors keep asking: will the hundreds of billions of dollars that big tech companies are spending on artificial intelligence and data centres bring enough profit to justify the cost? There are also worries that high interest rates could slow the building of new data centres.
Shares outside technology held up better. Many companies rose after reporting stronger summer profits than analysts had expected.
Even after the fall, the S&P 500 is only about 3.4% below its all-time high. Markets now look ahead to the US midterm elections on Tuesday, 3 November.
Sources: Associated Press market report, as published by ABC News (Australia), CBC and The Washington Times.