Wall Street Suffers Worst Day Since June as AI Spending Fears Trigger Tech Rout
Written by AI from abc.net.au's report. Not checked by a person.
A sharp sell-off sent the Nasdaq down 2.9% and the S&P 500 down 1.8%, closing out a third straight losing week, as investors questioned the returns on Big Tech's massive AI infrastructure spending after Intel posted its worst single-day loss since 1974.
US equity markets suffered their sharpest single-session decline since June, dragged down by deepening doubts about the artificial-intelligence investment boom. Intel's stock plunged 28.6% — its worst day since 1974 — after the chipmaker issued a disappointing profit forecast for the final quarter of the year, with CEO Lip-Bu Tan citing continued pressure across the personal-computer industry. The Nasdaq composite fell 2.9% and the S&P 500 dropped 1.8%, closing out a third straight losing week, while the Dow Jones Industrial Average shed 572 points, or 1.1%. Nvidia fell 4.2%, the single largest drag on the S&P 500. Amazon declined 1.4% after reporting a weaker-than-expected summer profit; it had burned through US$42.4 billion ($60.3 billion AUD) in free cash flow and spent US$94.8 billion ($134.8 billion AUD) on property and equipment — largely AI investments — over the prior 12 months. A day earlier, Alphabet had plunged more than 12% in its worst session on record after disclosing similarly heavy AI outlays. Analysts described the mood as a shift from the "hopes and dreams" phase of the AI trade to a "show me" phase demanding visible returns. US stocks remained only about 3.1% below all-time highs, with upcoming midterm elections adding to uncertainty. A hack on the world's largest crypto exchange pushed Bitcoin below US$77,000 ($109,500 AUD) from above US$86,000 earlier this month, further souring investor sentiment.
