Wall Street Falls in a Negative Session for the Tech Sector Amid U.S. Economic Weakness Warnings

Dell Technologies plunged 20%, hitting the sector hard due to its AI server portfolio falling short of expectations, following Salesforce’s similar decline yesterday.

Tech stocks led a negative session on Wall Street this last Friday of May, as Dell Technologies failed the relentless test of Artificial Intelligence (AI), while investors also processed April inflation data and a particularly weak business survey in the United States.

In LATAM, other indices suffered the same fate. For example, the headwinds extended to the Santiago Stock Exchange. The S&P IPSA fell 0.46% to 6,608.85 points, with 19 of its 29 stocks declining. The biggest drops were in Cencoshopp (-1.97%), CAP (-1.87%), and Cencosud (-1.84%).

Meanwhile, on Wall Street, the Nasdaq Composite lost 1.17%, the S&P 500 fell 0.43%, and the Dow Jones rose 0.48%. Dell Technologies (-20.25%) hit the sector hard with its AI server portfolio falling short of expectations, following Salesforce’s 20% drop yesterday due to warnings it might be falling behind in the race.

Traders sold stocks to opt for safer assets in the fixed income market, where U.S. bonds shook off some of the pessimism that dominated earlier this week.

The core PCE index, considered the Federal Reserve’s “favorite inflation gauge,” rose 0.2% month-over-month and maintained an annual rate of 2.8%, as expected. However, real personal consumption unexpectedly contracted by 0.1%.

Additionally, the Chicago business confidence index, compiled by Market News International, plunged to a four-year low, contrary to forecasts. It marked six consecutive months of decline, all below the 50-point expansion zone.

ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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