Wall Street closes sharply lower as AI spending fears trigger tech selloff

what happened

According to Reuters, US stocks fell sharply on Friday. The Nasdaq Composite lost 2.84%, its largest one-day percentage decline since June 5. The S&P 500 dropped 1.80% to 7,580.21 points, while the Dow Jones Industrial Average slid 1.09% to 51,770.58 points. The selloff was triggered by disappointing quarterly results from Intel and Amazon, which intensified doubts about whether companies' huge spending on artificial intelligence will generate a return.

Chip stocks dropped sharply, pulling the Philadelphia SE Semiconductor Index into a monthly loss. According to LSEG, 82% of S&P 500 companies that have reported so far beat consensus estimates, and the index is expected to show third-quarter earnings growth of 31.6% year on year. Oil majors Exxon Mobil and Chevron also beat profit forecasts, helped by wider margins from energy supply disruptions.

Crypto-related firms Coinbase, Strategy and Robinhood fell after reports that hackers stole $6.3 billion from Binance, the largest cryptocurrency exchange.

why it matters

The selloff suggests investors are becoming stricter with AI companies, rewarding only those that meet very high expectations and punishing misses hard. The key question for investors is when and how quickly AI spending starts to produce profits.

market impact

US tech stocks: weak results and AI spending fears weigh on the Nasdaq and S&P 500

• ▼Nasdaq Composite pressure down — weak Intel and Amazon results deepened doubts about returns on AI spending
• ▼S&P 500 pressure down — the tech selloff pulled the broad index lower
• ▼Crypto-related stocks (Coinbase, Strategy, Robinhood) pressure down — reports of $6.3 billion stolen from Binance hit the sector

instruments