Stock Market Today, Oct. 16: Tech Stocks Plunge as AI Software Valuations Reverse

The S&P 500 fell 1.07% to 7,661 as AI-related software stocks experienced a sharp reversal. The Nasdaq Composite plummeted 2.15% to 26,140 due to broad technology selling, while the Dow Jones Industrial Average slipped 0.34% to 52,002. Despite this dip, the Dow outperformed its peers to record its second consecutive weekly gain, according to Motley Fool.

In individual stock movements, Alcoa shares jumped 5.80% following a third-quarter earnings beat, and Ford gained 2% as investors moved into defensive blue chip names. Conversely, Fox Factory plummeted 13.30% after announcing a lower financial outlook and an unplanned CEO departure. Palantir Technologies fell 7.22%, entering correction territory as software valuations pulled back.

Neocloud CoreWeave ended the week down 25%, following a note from Goldman Sachs stating that hedge funds sold AI stocks at the second-fastest pace in over a year. Motley Fool reports this was a tactical rotation from smaller AI names toward steadier AI names or non-AI stocks.

Gold prices rose 0.43% to $4,187.90 at the U.S. market close, and the 10-Year Treasury yield declined to 5.10%. While Energy led sector gainers, Communication Services paced the decliners, followed by significant weakness in the technology sector.

Brief written by urgent.news from Nasdaq Markets, Motley Fool — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.