Daily Stock Market Update: S&P 500 and Dow Fall More Than 1%
Stocks continued to fall on Thursday and are being pulled down by fears that the AI market will collapse.
Quick overview
- Stocks experienced a significant decline on Thursday, with the Nasdaq dropping 2.2% and the S&P 500 losing 1.6%.
- Tech stocks, particularly Tesla and Palantir, were among the hardest hit, reflecting ongoing investor fears about the AI market.
- The recent downturn marks the worst single-day performance for the stock market in over a month, leading to concerns about a potential reset in tech valuations.
- As the AI bubble shows signs of bursting, further declines in tech stocks are anticipated in the coming weeks.
Stocks took a sharp downward turn on Thursday as tech shares fell, causing the Nasdaq to drop 2.2% and the S&P 500 to lose 1.6%. The Dow also slipped 1.6% as the bears took over.
Technology stocks took a hit on Thursday and continued to fall on Friday as the market opened. Major decline across the U.S. stock indices on Thursday resulted in the worst single day performance for the stock market in over a month.
The stocks hit the hardest by the decline were tech stocks, which included Tesla (TSLA), which dropped 4% and Palantir (PLTR), which fell 4% as well. As fears over the AI market persist, technology stocks will continue to feel the heat from skittish investors.
Stocks Expected to Decline Further
The tech rally we saw last week never kept up its momentum, derailed over concerns that the AI market will peak soon and not give investors a return on what they have spent to develop the technology. This week saw the steep decline of Oracle (ORCL) and Bitfarms (BITF) stocks, both of which made waves in the AI space this year but have disappointed investors in recent quarterly earnings statements.
The AI trade has propped up the Nasdaq Composite throughout much of the year, but now we are seeing something of a reset. The tech stocks are pulling back as investors are becoming afraid of where the market is headed. If the AI bubble bursts, that leaves dozens of tech stocks to try to scrape their way back up to 2025’s all-time highs.
All three stock indices set multiple record highs this year, but they have fallen from those levels in recent weeks, a decline prompted mostly by falling tech stocks. We may continue to see AI-related stocks fall in the coming weeks as prices pull back. The furious upward momentum of these stocks in September and October has resulted in overvalued stocks that cannot keep up their price levels and that have run out of steam. Now, prices are settling down to more reasonable levels.
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