Nasdaq Falls 0.21% as Dow and S&P 500 Rise
Technology stocks are having a tough time thanks to fears over artificial intelligence losing its relevancy.
Quick overview
- Tech stocks experienced significant losses last week, with the Nasdaq Composite falling 0.21% on Friday, marking its largest decline since April.
- The Dow Jones, in contrast, saw a slight increase of 0.16%, indicating mixed performance across different stock sectors.
- Investors are hopeful for a recovery this week, buoyed by news that the government shutdown may soon end and lighter economic data ahead.
- Concerns remain about the sustainability of investments in artificial intelligence, as major tech companies continue to pour resources into this rapidly evolving market.
Tech stocks took a hit last week while other stocks performed decently. The Nasdaq Composite stumbled at the weekend, but the Dow Jones climbed 0.16%.
The Nasdaq marked one of its biggest losses in months thanks to declining technology stocks, and that index fell 0.21% on Friday. That marked a sharp decline over the week that has not been matched since April of this year.
Stocks should improve this week thanks to news from the U.S. Senate that the government shutdown could be ending soon. Last week was heavy on economic data and quarterly earnings, while this week should be lighter and should give investors more room to breathe and watch natural stock progression without as many compounding factors.
Tech Stocks Take a Hit
Over the course of last week, major technology stocks suffered greatly, leaving investors wondering how much longer artificial intelligence can keep up its momentum. Oracle (ORCL) fell dramatically throughout last week, losing about 9.5% of its value. The stock is up by 2.5% for Monday in premarket trading. So, there is hope that it will start to recover with less pressure on it.
Advanced Micro Devices (AMD) plummeted throughout the week as well, shedding about 6.8% of its value. Like Oracle, this stock is up today, adding an impressive 3.19% in premarket trading. We will likely see similar stories for other major tech stocks as they begin the climb back up to their previous peaks this week.
Investors should be aware that these stocks could turn quickly, though, falling back down as the market opens up fully. There is rising concern that the artificial intelligence market will not be able to sustain the massive investments that companies are pouring into it. If negative sentiment persists, then we could see investors shift further away from this niche and continue to pull back. For now, we are only seeing an initial wave of fear with reassurance early this week that the market still has plenty of life left in it.
Companies like Microsoft, Alphabet, and Amazon are investing millions into artificial intelligence, banking on this technology to benefit them tremendously over the next few years. There is a race right now to see who can develop the fastest and most powerful AI programs, and chipmakers like Nvidia are profiting from the gold rush. Will the AI bubble burst soon, however, or are the major tech companies wise to invest in this market for the future?
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