"A rough week for tech stocks might signal a loss of investor confidence in artificial intelligence. The Wall Street Journal reports that the Nasdaq Composite Index was down 3% - making this its worst week since President Donald Trump announced his sweeping tariff plan in April. Tech companies that have otherwise performed well this year were among those hardest hit, with Palantir's stock price falling 11% this week, Oracle declining by 9%, and Nvidia losing 7%."
"These drops also come after earnings reports in which Meta and Microsoft indicated that they plan to continue spending heavily on AI (both companies were down about 4%). "Valuations are stretched," Cresset Capital's Jack Ablin told 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 factors like the ongoing government shutdown, declining consumer sentiment, and widespread layoffs are also likely dragging down the stock market."
The Nasdaq Composite Index fell 3%, marking its worst week since President Donald Trump's April tariff announcement. Palantir dropped 11%, Oracle fell 9%, and Nvidia lost 7% over the week. Meta and Microsoft signaled plans to continue heavy spending on AI and were each down about 4% after earnings. Cresset Capital's Jack Ablin warned that valuations are stretched and that minor bad news is amplified while positive news often fails to move markets because expectations are high. Additional pressures included an ongoing government shutdown, declining consumer sentiment, and widespread layoffs. The S&P 500 and Dow fell 1.6% and 1.2%, respectively.
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