Nasdaq falls 2.6% as AI stocks slide, Lam Research drops 11.8%
The Nasdaq fell 2.6% on Thursday and the S&P 500 lost 1.2% as AI stocks slid, AP and CBS News reported. The Dow ended up just 11.89 points, AP reported. Lam Research fell 11.8%, AP reported, and Meta lost 7%, CBS News reported.
Tech stocks tied to artificial intelligence pulled Wall Street lower on Thursday, according to AP and CBS News.
At the 4 PM ET close Thursday, the Nasdaq composite fell 694.00 points, or 2.6%, to 26,008.86, according to AP's closing figures. The S&P 500 fell 93.74 points, or 1.2%, to 7,663.43, AP reported. It was the index's worst day since July, AP said. The Dow Jones Industrial Average rose 11.89 points to 52,867.98, AP reported.
CBS News said the Nasdaq was down as much as 751 points, or 2.8%, shortly before the close. It then bounced back a little.
Investors are worried about how much AI companies are spending, CBS News reported. Many are taking on big debts to build data centers, and it is not clear the bets will pay off, CBS News said, citing Wall Street analysts. AP said investors worry that it has become costly to borrow money for data centers and chips. Some also think AI stock prices rose too high, AP said.
Lam Research, which makes equipment used to build computer chips, fell 11.8%, AP reported. Its profit and revenue beat forecasts, but its profit outlook for this quarter came in a bit below what analysts expected, AP said. The company cited "supply chain constraints" on its earnings call, Yahoo Finance reported.
Meta lost 7% after its revenue beat estimates but its profit fell short, CBS News reported. Nvidia fell 4.4% and Tesla fell 3.1%, AP reported. CoreWeave, which rents out AI chips, dropped 10.1%, AP said.
Most stocks rose, AP said. Two out of three stocks in the S&P 500 gained, but the drops in big tech stocks outweighed them. Procter and Gamble rose 5.6% after its profit beat forecasts, AP reported.
Oil also weighed on markets. Brent crude jumped 4% to $113.17 a barrel, AP reported, citing worries about the war with Iran.
Investors bought US government bonds as stocks fell, AP said. The yield on the 10-year Treasury fell to 4.97% from 5.13% late Wednesday, AP reported.
What we know: Tech stocks fell sharply Thursday, led by chip and AI names.
What we don't: Whether the sell-off will continue on Friday.
Where outlets agree AP and CBS News report that the Nasdaq closed 694 points lower and the S&P 500 fell 1.2%, and both report that Tesla fell 3.1%.
Where they differ The cited reports agree on the key facts so far.