Wall Street got a reality check as a bruising selloff in technology shares fueled concern the artificial-intelligence frenzy that has powered the equity bull market might be overblown.
Disappointing tech results spurred the worst drop for stocks since June, with the Nasdaq 100 sinking 3.5% and briefly crossing the threshold of a technical correction. Intel Corp. slid the most in over four decades. The S&P 500 fell 1.8%, breaching its 100-day moving average.
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S&P Global Ratings took an early step toward potentially downgrading Meta Platforms Inc.'s credit rating within the next two years, amid growing pressure on its balance sheet stemming from elevated spending tied to AI.
Nasdaq 100 posts worst month since March 2025
Apple Inc. reclaimed the title of world's most valuable company, taking the mantle from Nvidia Corp. as investors seek the perceived safety of the iPhone maker amid concerns about AI spending.
The core businesses of America's tech giants - the advertising, consumer and retail machines propping up a collective $750 billion in AI spending this year - are starting to show signs of slowing.
"The revelation that these hyperscalers are seeing a slowdown in their core businesses means that the big payoff that everyone has been saying will come eventually is getting pushed even further down the road," said Matt Maley at Miller Tabak.
While AI demand remains robust, there's a rising risk of mid-cycle capital expenditures indigestion, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.
"We continue to see scope for equity gains overall and believe investors should focus on building a resilient portfolio that includes exposure beyond tech," she said.
Looking ahead, Maley noted that the biggest problem investors will face is that the rotation that has held up the US stock market could easily disappear.
"If the major averages begin to drop in a more compelling manner, it is very likely that investors will stop rotating into other sectors and start rotating into cash," he said.
Elsewhere, a burst of selling hit crypto as Binance revealed a record hack that renewed questions about the security of customer assets. Higher oil prices added to anxiety amid speculation the US may resume strikes against Iran. While Treasuries barely budged Friday, they saw a solid month.
Some of the main moves in markets:
Stocks
- The S&P 500 fell 1.8% as of 4 p.m. New York time
- The Nasdaq 100 fell 3.5%
- The Dow Jones Industrial Average fell 1.1%
- The MSCI World Index fell 1.5%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro was little changed at $1.1169
- The British pound rose 0.1% to $1.3396
- The Japanese yen rose 0.1% to 157.52 per dollar
Cryptocurrencies
- Bitcoin fell 2.5% to $76,813.65
- Ether fell 0.9% to $2,236.76
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.92%
- Germany's 10-year yield declined three basis points to 3.32%
- Britain's 10-year yield declined one basis point to 5.28%
Commodities
- West Texas Intermediate crude rose 0.9% to $102.94 a barrel
- Spot gold fell 3.3% to $3,886.81 an ounce
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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