- Major indices tumbled as the Nasdaq, S&P 500, and Dow all closed sharply lower amid profit-taking and risk-off sentiment, with the tech-heavy Nasdaq hitting multi-week lows.
- Cryptocurrencies weakened, led by Bitcoin slipping below key levels near $63,000, while traditional safe havens like gold saw modest inflows.
- Investor concern over lofty AI valuations and softer economic data drove selling pressure, supported by technical breakdowns and heightened short interest in growth stocks.
Major global stock indices tumbled again in trading Thursday as investors grew increasingly cautious over lofty artificial intelligence (AI) valuations and disappointing economic signals, pushing markets firmly into risk-off mode. The tech-heavy Nasdaq Composite hit its lowest levels in months while Bitcoin and other cryptocurrencies slid sharply amid broad selling pressure.(Reuters)
Equity markets in the U.S. closed deeply in the red, reflecting heightened volatility across sectors tied to AI and growth. The Nasdaq Composite ended down roughly 1.6%, marking its weakest showing since last November. The S&P 500 fell about 1.2%, while the Dow Jones Industrial Average lost around 1.2%, with most industry groups finishing lower.(Reuters)
Heavyweight technology and AI-linked stocks extended the downturn, with Microsoft, Amazon, Alphabet, Oracle, Palantir, Salesforce, and other growth names trading lower as profit-taking intensified. The selloff came even as some companies reported solid fundamentals, underscoring investor skepticism about whether future AI spending will translate into near-term earnings growth.(Reuters)
Market participants pointed toward an increasingly sharp re-evaluation of AI valuations as a key catalyst. A wave of tech capital expenditures — including Alphabet’s plan to boost AI-related spending this year well above analyst estimates — heightened questions about profit sustainability.(Reuters)
Investor caution was compounded by fresh economic data suggesting softening labor market conditions and cooling growth momentum, reinforcing concerns that lofty valuations may be premature amid slower macroeconomic trends.(Investopedia)
Technical indicators added to bearish sentiment. The Nasdaq’s breach of key moving averages and elevated CBOE Volatility Index levels suggested growing hesitancy among momentum traders, while short interest in high-growth software and AI names climbed, signaling increasing bearish bets.
“The disconnect between sky-high AI valuations and real earnings growth is starting to bite,” said Mark Reynolds, chief market strategist at Horizon Capital, in comments to Bloomberg. “We’re seeing rotation out of speculative tech names into more defensive exposures as investors price in slower economic momentum.”(Reuters)