Wall Street indices slumped by over 1% on Friday as technology stocks fell sharply. The Nasdaq 100 dropped 3.5% amid worries that artificial intelligence hype is exaggerated. Intel Corp. saw its largest decline in forty years. Meanwhile, Apple regained its status as the world's most valuable company over Nvidia Corp.
Wall Street experienced a significant downturn as the US indices closed for the week on Friday, as the benchmarks slumped by over 1%.
A sharp decline in technology stocks raised concerns that the artificial intelligence hype, which has driven the equity bull market, may be exaggerated.
Disappointing results from tech companies triggered the largest stock drop since June, with the Nasdaq 100 plummeting 3.5% and briefly entering a technical correction. Intel Corp. faced its largest decline in over forty years. The S&P 500 fell 1.8%, dropping below its 100-day moving average.
As per a Bloomberg report, S&P Global Ratings has taken preliminary steps towards a potential downgrade of Meta Platforms Inc.’s credit rating within the next two years, due to increasing pressure on its balance sheet resulting from high expenditures related to AI.
Apple Inc. has regained its status as the world's most valuable company, overtaking Nvidia Corp. as investors seek the relative safety of the iPhone manufacturer amid concerns regarding AI investments.
Another report said that the primary operations of America's technology giants the advertising, consumer, and retail sectors that support a combined $750 billion in AI expenditures this year, are beginning to exhibit signs of deceleration.
In other news, a wave of selling impacted the cryptocurrency market as Binance disclosed a record hack, reigniting concerns about the security of customer assets.
Rising oil prices, with Brent crude consistently above the $115 mark, have further contributed to anxiety amid speculation that the US may resume military actions against Iran. While Treasuries remained relatively stable on Friday, they experienced a strong month overall.