A difficult week for technology shares could point to dwindling investor faith in artificial intelligence.
The Wall Street Journal notes that the Nasdaq Composite Index decreased by 3% — marking its most challenging week since President Donald Trump revealed his extensive tariff strategy in April.
Tech firms that have generally fared favorably this year experienced some of the most significant setbacks, with Palantir’s share value dropping by 11% this week, Oracle decreasing by 9%, and Nvidia falling by 7%. These declines also follow earnings updates where Meta and Microsoft suggested their intentions to maintain considerable AI spending (both saw declines of roughly 4%).
“Values are extended,” Cresset Capital’s Jack Ablin stated to the WSJ. “Even a small amount of unfavorable information becomes amplified … and positive information isn’t sufficient to shift things much, as expectations are already notably elevated.”
Economic influences such as the continuing government closure, reduced consumer confidence, and widespread job cuts are probably also weighing down the stock market. However, the S&P 500 and Dow Jones Industrial Average, which are less focused on technology, did not perform quite as poorly, decreasing by 1.6% and 1.2%, respectively.
