Global markets fell sharply Thursday as artificial-intelligence stocks slumped amid mounting worries over high interest rates and the soaring cost of building data centers. The S&P 500 dropped 1.4 per cent, according to The Associated Press, while BNN Bloomberg reported the benchmark index fell 1.2 per cent for its worst day since July. Meanwhile, the Nasdaq composite tumbled between 2.6 and 2.8 per cent, and Brent crude oil prices touched their highest level in five months due to uncertainty surrounding the war with Iran.
Stock Tumbles For Lam Research And Meta Platforms
Semiconductor equipment maker Lam Research reported summer profit and revenue that topped analyst expectations, yet its stock tumbled 11.6 per cent after giving a quarterly profit forecast whose midpoint fell slightly short of Wall Street estimates, The Associated Press reported. The sell-off followed a 52.4 per cent surge for the stock earlier in the year. Meta Platforms lost 7.9 per cent after posting stronger-than-expected revenue while its profit missed expectations. The company also announced plans to create a new class of stock to fund AI investments and other expenses. Lam Research was down 10.1 per cent and Meta lost 5.7 per cent during morning trading.
Nvidia And CoreWeave Drag Down The Nasdaq
Nvidia dropped 4.3 per cent, acting as the heaviest single weight on the S&P 500 due to its status as Wall Street’s largest stock by total value. Cloud provider CoreWeave, which borrows money to purchase Nvidia AI chips for customer rentals, fell 11 per cent amid ongoing debt concerns. Asian markets bore the initial brunt of the tech sell-off, with South Korea’s Kospi tumbling 3.5 per cent, Hong Kong’s Hang Seng dropping 3 per cent, and Japan’s Nikkei 225 sinking 2.7 per cent. European indices also suffered, as France’s CAC 40 index fell 1.4 per cent under pressure from rising French government bond yields.
Oil Prices And Bond Yields React To Global Pressures
Brent crude oil rose 3.7 per cent to US$112.80 a barrel, climbing from below US$97 at the start of the month. As equities were sold off, investors gravitated toward safer options, pushing the return on the 10-year U.S. Treasury down to 4.96 per cent from its previous level of 5.13 per cent. The drop in U.S. yields occurred despite a report showing that fewer American workers applied for unemployment benefits last week, signaling a potentially resilient domestic economy. Procter & Gamble gained 6 per cent after topping summer profit expectations and maintaining its full-year growth forecasts, helping limit broader market declines on a day when two-thirds of S&P 500 stocks actually rose.
Frequently Asked Questions About The Market Downturn
Why did the S&P 500 and Nasdaq fall so sharply on Thursday?
The S&P 500 fell 1.4 per cent and the Nasdaq tumbled 2.8 per cent as artificial-intelligence stocks slumped worldwide. Investors worried that high borrowing costs and expensive data center investments might threaten the ongoing AI boom.
How much did oil prices increase amid the conflict with Iran?
Brent crude gained 3.7 per cent to hit US$112.80 per barrel, marking a five-month high. The surge stems from uncertainty over when the war with Iran will allow the global energy industry to return to normal operations.
What happened to U.S. Treasury yields during the stock market sell-off?
Following the close on Wednesday, the 10-year Treasury return dropped from 5.13 per cent down to 4.96 per cent. Investors bought U.S. government bonds in search of safer assets as AI and tech stocks dropped.