The Nasdaq suffered its steepest single-day percentage fall since June 5 on Friday as disappointing results from major technology companies and mounting concerns over returns from artificial intelligence investments triggered a fresh selloff in global tech stocks.
The Nasdaq Composite fell 2.86% to close at 25,437, while the S&P 500 dropped 1.82% to 7,580.07. The Dow Jones Industrial Average declined 1.09% to 51,770.31. The Nasdaq Composite is now down 7.8% from its record closing high on October 6.
The selloff reflects growing investor unease over Big Tech's AI spending spree. Companies are committing hundreds of billions of dollars to data centres, chips and computing infrastructure, but markets want clearer evidence of when that investment will translate into profits.
More than $2 trillion in market value is set to be wiped off the Nasdaq 100 in October, with the index down over 5.8% this month, according to Bloomberg. The Nasdaq 100 and Nasdaq Composite are separate indices.
Amazon, Alphabet, Microsoft and Meta are together on track to spend more than $700 billion on capital investment this year, much of it on AI infrastructure. The companies are racing to expand data centre capacity and secure the chips and computing power needed to develop and run AI models.