When the chips are down: AI worries drag Nasdaq, S&P 500 lower
SPY•The Nasdaq fell more than 1% and the S&P 500 also declined as chip stocks dropped 4%, while the Dow gained. Investors weighed concerns about AI-related borrowing, hotter-than-expected inflation and stronger retail sales.
1. Chip stocks lead declines
Wall Street stocks fell on Thursday, with the Nasdaq down more than 1% and the S&P 500 lower, while the Dow rose. The indexes were on track for a fourth consecutive down day, as chip stocks dropped 4%. Technology and industrials were among the weakest S&P 500 sectors, while consumer staples led gainers.
2. Inflation and AI concerns
Worries about mounting debt to fund AI spending have pushed tech default insurance to record highs, while hotter-than-expected inflation data raised concern that the Federal Reserve could tighten policy. The Labor Department’s producer price index report exceeded analyst expectations, and stronger-than-expected retail sales pointed to consumer resilience. The 10-year Treasury yield fell to about 5.04%.
