Wall Street sinks as Nasdaq falls over 2% on AI cost worries
SPY•The Nasdaq fell 2.06% and the S&P 500 lost 1.10% as investors weighed the costs and uncertain returns of AI spending. The Dow slipped 0.06%.
1. AI spending concerns weigh
The tech-heavy Nasdaq slid more than 2% as growth stocks weakened after results from Tesla and Meta did little to ease concerns about AI-related costs. Meta fell 5.2% despite stronger-than-expected quarterly revenue and an upbeat fourth-quarter sales forecast; Tesla fell 0.7% after cutting its annual capital expenditure forecast.
2. Market declines broaden
At 11:58 a.m. ET, the S&P 500 was down 1.10% and the Dow was down 0.06%. The Philadelphia Semiconductor Index fell 5.6% to its lowest since July 29, while technology was the weakest S&P 500 sector, down more than 2.7%. Brent crude hovered near a five-month high, and the 10-year Treasury yield fell to around 5.0025%.
3. Some stocks advance
Procter & Gamble rose 6.1% after beating first-quarter estimates. Lockheed Martin gained 5.9% after raising its annual sales and profit forecast, while Spotify climbed 9% after forecasting fourth-quarter profit above Wall Street estimates.
