Brutal sell-off for AI stocks sends Wall Street reeling
The nationwide victories for the Democrats have raised the possibility that governments could force pauses in the construction of more data centres.
Brutal sell-offs hit Wall Street on Thursday, with stocks tied to the construction of AI data centers leading the market decline. The S&P 500 fell 4.4%, marking its worst day in three months, while the Dow Jones Industrial Average dropped 1,833 points, or 3.4%. The Nasdaq composite, heavily focused on AI-related and other tech stocks, plummeted 5.5%, falling below its all-time high set last month. A loss of more than 10% is considered a "correction" in stock market terminology.
Critics argue that AI stock prices had inflated and were in a bubble. The nationwide victories for Democrats in the US midterm elections raised concerns that governments might impose pauses in the building of additional data centers due to rising costs of borrowing money. This uncertainty led to stock price fluctuations, particularly for AI and technology companies.
Nvidia, a leading chip company, saw its stock price plummet by 9.3%, while Advanced Micro Devices fell 17.3%, and CoreWeave, an AI chip rental company, dropped 9.8%. These declines have significant implications for the US economy, as a slowdown in AI data center construction would result in reduced purchases of AI chips and other related products and services, directly impacting the growth of the economy.
Written by urgent.news from CNA - Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
