Stocks took a sharp nosedive on Thursday, driven by a pullback in the tech sector. Microsoft and Meta faced significant losses as concerns over AI spending resurfaced. Despite this, jobless claims dropped more than expected, and the Federal Reserve’s preferred inflation gauge inched closer to the 2% mark.
The tech sell-off was triggered by the latest earnings reports from major companies, which surpassed estimates but fell short in other areas, fueling worries about heavy investments in artificial intelligence. The Nasdaq plummeted nearly 3%, while the S&P 500 and Dow Jones Industrial Average also experienced significant declines.
Microsoft’s stock took a hit after the company projected revenue figures below analysts’ expectations, citing investments in cloud computing capacity for AI demand as a contributing factor. Likewise, Meta announced increased capital expenditures for the upcoming year as it continues to invest in AI, raising its capex forecast for this year.
Ruminating on Meta’s spend, UBS analysts expressed positivity regarding the expected outcomes of the increased investments, emphasizing the growth potential. On the flip side, investors also digested the Federal Reserve’s inflation data, along with better-than-expected jobless claims figures.
Looking forward to what else is happening in the finance landscape, key insights from Goldman Sachs predict a potential surge in gold prices, while legendary investor Jeremy Grantham warns of an impending burst in the AI hype bubble. Additionally, CoinBase’s CEO anticipates a more crypto-friendly Congress in the future, promising additional political funding, while MicroStrategy plans to raise a substantial sum to purchase more bitcoin.
In the commodities, bonds, and crypto realms, oil futures were on the rise, gold prices slipped, the 10-year Treasury remained steady, and Bitcoin maintained trading around a certain value. Stay tuned for more updates on Extreme Investor Network as we unravel the latest trends and forecasts in the financial world.