AI Spending Anxiety Triggers Tech Sell-Off on Wall Street

The sell-off centered on Meta Platforms, which plummeted 7% after reporting profit figures that missed Wall Street expectations alongside a commitment to billions in future AI-related spending. Analyst Louis Navellier noted that the market is currently discarding tech holdings indiscriminately, a sentiment echoed by Nvidia CEO Jensen Huang, who highlighted critical capital shortages for companies building the infrastructure behind AI hyperscalers. The PHLX Semiconductor Sector index bore the brunt of this pessimism, sliding 6.7%.

While tech shares struggled, investors sought refuge in Treasury markets. The yield on the two-year note dropped 0.188 percentage points to 4.635%, the largest single-day decline in over a year. Meanwhile, external shocks influenced commodities, with Brent crude oil jumping 4% to $113.17 per barrel following heightened geopolitical tensions in the Middle East. Despite the equity volatility, broader economic data remained resilient, with falling unemployment claims keeping the Federal Reserve’s upcoming interest-rate decision in focus. Individual company performance diverged from the broader trend, as Moderna shares sank 18% on leaked vaccine trial data, while Spotify and Lockheed Martin recorded significant gains.