Wall Street tumbles amid concerns over AI spending
Shares of Meta Platforms (-4.09%) and Microsoft (-6.03%) fell despite both companies exceeding analyst earnings expectations.
The U.S. stock market declined in the last session of October, a day after Microsoft and Meta Platforms highlighted the costs tied to investments in the AI trend.
Wall Street’s main indices ended Thursday with losses. The Dow Jones Industrial Average, which tracks 30 large-cap companies, fell by 0.90% to 41,763.46 points, while the S&P 500, representing 500 companies, dropped 1.86% to 5,705.45. The tech-heavy Nasdaq Composite declined 2.76% to 18,095.15.
Shares of Meta Platforms (-4.09%) and Microsoft (-6.03%) fell despite both companies exceeding analyst earnings expectations in their recent reports. Both companies’ reports underscored high capital expenditure projections.
Apple surpassed Wall Street’s sales and earnings expectations for its fiscal fourth quarter on Thursday, driven by early sales of the iPhone 16—a new line of phones designed for advanced AI features, which launched near the end of the quarter.
AI-related stocks in particular closed lower, as these reports raised doubts about a trend that has propelled the market this year. Alphabet’s shares (-1.96%), which had risen after its report the previous day, also took a hit.
Other stocks among the so-called “Magnificent Seven” tech giants closed lower as well. Amazon.com (-3.28%) and Apple (-1.92%) declined ahead of their quarterly results, while Tesla (-2.99%), which had already reported, also slid. Nvidia (-4.72%) remains the only one yet to report.
Wall Street closed out October with overall losses. The Dow Jones posted a monthly decline of 1.34%, while the S&P 500 fell by 0.99%, and the Nasdaq slipped 0.52%.
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