The S&P 500 fell 1.5%, the Dow lost 1.3% and the Nasdaq 100 dropped 2% on Thursday, as early gains reversed under persistent pressure from the technology sector. Volatility across AI-linked industries reflected growing doubts about both the scale and eventual returns of heavy capital expenditure on compute infrastructure, while concerns that automation could undermine established business models weighed on software stocks and select financial names. Apple slid 5% in its worst session since April, and Amazon, Meta, Broadcom and Palantir declined between 2.3% and 4.8%. Cisco tumbled 12.3% after issuing weak guidance. Banks also stayed under pressure amid heightened scrutiny of credit card interest rates.
By contrast, defensive stocks outperformed: Walmart gained 3.8% and McDonald’s rose 2.7% following earnings, while Micron advanced on progress in HBM4 production. A stronger-than-expected jobs report earlier in the week continued to push back expectations for near-term Federal Reserve rate cuts ahead of Friday’s CPI release.
