Technology shares lead a broad retreat
Equities fell on Thursday as anxiety about artificial intelligence spending returned and crude prices climbed amid rising geopolitical tension. The technology-heavy Nasdaq Composite lost 2.1%, the S&P 500 gave up 1.3% and the Dow Jones Industrial Average declined 279 points, or 0.5%. Meta Platforms dropped 5% even though it beat revenue expectations and issued an upbeat outlook, with the wider technology sector also under strain.[S1][S2][S3][S4]
Advanced Micro Devices fell more than 5%, while Micron Technology and Nvidia each lost ground, down 2% and 1% respectively. CoreWeave, a leading neocloud provider whose bond yields and credit default swaps have stayed elevated, declined almost 4%. The selling spread beyond the United States, with AI-related stocks dragging markets lower worldwide as oil prices rose.[S1][S4]
Capital scarcity comments unsettle investors
Nvidia chief executive Jensen Huang said Thursday that demand for neoclouds is extremely strong, but he also noted that capital is scarce and holding back growth. Wells Fargo traders said in a note that his remarks on limited capital were unsettling markets and reviving worries that credit markets may already be stretched in terms of risk appetite. They added that Meta's comments about the scale of AI funding required caused its shares to reverse and weighed on the broader market.[S1]
JPMorgan traders observed that Wednesday's bullish mood flipped overnight as Meta shares turned lower before the open and discussion grew about renewed Iran-related military risk after the U.S. midterm elections. In a note to clients, they said price action and feedback from their trading desk pointed to a still fragile narrative around AI financing and a lack of conviction following the recent technology reversal.[S1]
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Oil climbs on reported strike plans
Oil benchmarks rose sharply after The New York Times, citing sources, said Washington and Israel intend to launch fresh attacks on Iran once next month's midterm elections are over. Late Wednesday, President Donald Trump told reporters that the U.S. is not holding talks with Tehran and that developments would come relatively soon. Brent crude futures, the international benchmark, climbed 3% to trade above $112.45 a barrel, while West Texas Intermediate futures added 2% to top $99.95 a barrel.[S1]
Investors sought safety in U.S. Treasurys. The benchmark 10-year Treasury note yield fell more than 9 basis points to 5.048%, and the 2-year note yield also dropped 9 basis points to 4.733%.[S1]
