Key Takeaways
- Nasdaq fell to near one-month lows, dragged by AI-linked stocks.
- Tech stocks, including Nvidia and Micron Technology, suffered significant losses.
- Investors shifted to government bonds amid rising interest rate fears.
The Nasdaq Composite fell to near one-month lows on Thursday, reflecting a deepening selloff in artificial-intelligence (AI) stocks. The broader index lost 1.06%, marking its biggest one-day fall since July.
Tech stocks, particularly semiconductor makers and cloud computing giants, were hit hard. Nvidia, Micron Technology, and Advanced Micro Devices lost 3.3%, 5%, and 6.4% respectively, contributing to the Nasdaq's decline.
The slump was exacerbated by a cautious outlook from TSMC, the world's largest contract chipmaker, which cited macroeconomic uncertainties for its 2027 guidance.
Reports of Anthropic’s third-quarter revenues surging 45% did little to lift investor sentiment, while heavily indebted data-center operator CoreWeave lost 8.5% following a 15% drop on Wednesday.
The broader chips index has lost $2 trillion in value over 14 consecutive sessions, marking its longest losing streak since May 2025.
The S&P 500 information technology sector, which was the biggest drag, fell 2%. The Dow Jones Industrial Average rose 0.32% to 51,785.06, supported by gains in traditionally defensive sectors like healthcare and consumer staples.
Investors continued to move towards government bonds, with the 10-year US Treasury yield hitting a three-week low of 5.0725%. The CBOE Volatility Index, known as Wall Street’s fear gauge, reached a two-week high.
Market sentiment was further dampened by data showing US producer prices increasing by the most in 4-1/2 years, indicating broader inflationary pressures. These factors have raised concerns about higher borrowing costs and AI spending.
The Nasdaq has dropped more than 4% from record highs touched last week, with concerns about higher borrowing costs and AI spending threatening to overshadow the third-quarter earnings season, expected to see S&P 500 profits grow 30.6% according to LSEG data.
Investors are increasingly questioning how much future growth is already priced into valuations, how expansion is being financed, and when these investments will generate sufficient returns.
Charu Chanana, Chief Investment Strategist at Saxo
