Stocks fall on AI cash burn worries while bonds rally with oil
SPY•Wall Street technology shares tumbled as investors questioned whether heavy AI spending would generate sufficient returns, pushing MSCI’s global stock index down 1.5% and lifting US Treasuries. Intel fell 28.6%, the Nasdaq lost 2.86%, the 10-year Treasury yield dropped 5.8 basis points to 4.931%, and oil settled at $104.12 a barrel for US crude and $117.63 for Brent.
1. Technology shares slide
A sharp selloff in technology shares pushed MSCI’s global stock index down 1.5% on Friday as investors sought the safety of US bonds amid concern that heavy AI investments may not deliver sufficient returns. Intel shares plunged 28.6% after its results showed cash burn from investment and the company said slower PC demand could persist through next year; Amazon fell 1.4%. Alphabet lost another 1.4% after falling 12.6% on Thursday, when it reported that AI spending had turned cash flow negative.
2. Markets and energy
The Dow fell 1.09%, the S&P 500 lost 1.82% and the Nasdaq dropped 2.86%. The semiconductor index fell more than 7%, its biggest daily decline since late June. US 10-year Treasury yields declined 5.8 basis points to 4.931%, while US crude rose 2.08% to $104.12 a barrel and Brent gained 2.4% to $117.63.
3. Other market moves
Energy shares were supported by rising oil prices and strong profits at Exxon Mobil and Chevron, attributed to refining margins amid supply disruptions. Gold fell 3.63% to $3,874.58 an ounce, while bitcoin declined 2.49% to $76,877.30.
