US stock markets take a dip as big tech AI spending worries investors

US stock markets sank on Thursday as concerns over big tech companies’ spending on AI technology weighed on investor sentiment. The Nasdaq Composite, which is heavily influenced by tech stocks, experienced a 2.3% decline, while the S&P 500 dropped 1.4%. The Dow Jones Industrial Average also saw losses of around 0.5%. Microsoft and Meta, in particular, contributed to the market downturn with their quarterly reports, as investors reacted lukewarmly to the results. Despite surpassing expectations, both companies announced plans to further invest in AI infrastructure, leading to concerns about profitability. This negative sentiment spread to other tech giants such as Amazon and Apple, who are set to report their earnings after market close on Thursday. Nvidia, a key player in the AI sector, also suffered a 4% decrease in value. As a result, yields of the 10-year Treasury bonds rose by 4.33% as investors sought a hedge against the losses driven by AI investment. Although not all tech companies experienced negative outcomes, Alphabet CEO Sundar Pichai highlighted positive prospects for his company, citing high demand for AI and notable gains in Google’s search and cloud divisions. Pichai emphasized that Alphabet is well-positioned to lead in the evolving AI landscape.