A tough week for tech stocks could indicate a dip in investor confidence regarding artificial intelligence.
According to The Wall Street Journal, the Nasdaq Composite Index fell by 3%, marking its worst week since President Donald Trump introduced his extensive tariff plan in April.
Tech firms that have seen strong performance this year faced significant losses, with Palantir’s stock dropping 11%, Oracle losing 9%, and Nvidia down 7%. These declines followed earnings reports from Meta and Microsoft, both of which revealed plans to keep investing heavily in AI, resulting in each company’s stock decreasing by about 4%.
“Valuations are stretched,” said Jack Ablin from Cresset Capital in the WSJ. “Just the slightest bit of bad news gets exaggerated … and good news is just not enough to move the needle because expectations are already pretty high.”
Economic challenges like the ongoing government shutdown, shrinking consumer sentiment, and widespread layoffs are also likely impacting the stock market. However, the less tech-focused S&P 500 and Dow Jones Industrial Average performed slightly better, with declines of 1.6% and 1.2%, respectively.
