BREAKING: Wall Street is experiencing a significant downturn following alarming trends in artificial intelligence stocks. The S&P 500 plunged 1.1 percent from its record high on Friday, marking its worst performance in three weeks. The Nasdaq composite led the declines, dropping 1.7 percent, while the Dow Jones Industrial Average fell 245 points, or 0.5 percent, after reaching a record the previous day.
This sharp decline is set to impact the Australian sharemarket, with futures indicating a retreat of 51 points, or 0.6 percent, at the open. The market turmoil is largely attributed to a significant drop in **Broadcom**, which fell by a staggering 11.4 percent despite reporting stronger-than-expected profits. Concerns over future profitability and the sustainability of growth in AI semiconductor revenue have investors on edge.
The pessimism continued with **Oracle**, which also sank nearly 11 percent after announcing a robust quarterly profit. Analysts are questioning whether Oracle’s hefty investments in AI technology will yield the anticipated returns, raising doubts about the entire AI sector’s viability.
Adding to market pressures, the yield on the 10-year Treasury climbed to 4.18 percent, prompting fears that rising yields may deter investors from high-priced stocks. Despite these setbacks, the Federal Reserve’s recent interest rate cuts have provided some optimism, as investors are hopeful for a more favorable economic landscape.
On Friday, the S&P 500 fell 73.59 points to close at 6,827.41, while the Dow Jones dropped to 48,458.05 and the Nasdaq slumped to 23,195.17. Notably, shares of **Lululemon Athletica** surged 9.6 percent after exceeding profit estimates, highlighting a stark contrast to the broader market trends.
Global markets mirrored the U.S. downturn, with modest declines in Europe following a stronger performance in Asia, where stocks rose 1.7 percent in Hong Kong and 1.4 percent in Tokyo.
As the market grapples with these developments, all eyes will be on upcoming earnings reports and any further guidance from tech giants as investors seek clarity in this turbulent environment. Stay tuned for the latest updates as this story unfolds.
