Nasdaq Composite records biggest single-day decline since June
Technology and semiconductor stocks faced heavy selling pressure as investors questioned the sustainability of artificial intelligence spending.
The Nasdaq Composite recorded its largest single-day drop since June on Friday, according to a Reuters report cited by The Economic Times. The selloff was driven by investor reassessment of the massive capital being spent on artificial intelligence (AI) infrastructure.
Semiconductor and technology stocks saw significant losses during the session. Intel and social media firm Reddit both fell 29 per cent, while SanDisk dropped 13 per cent. Shares of Microsoft, Meta Platforms, Amazon, and Alphabet also declined between 1 per cent and 2 per cent.
The Nasdaq 100 fell 3.5 per cent on Friday, moving closer to a 10 per cent correction from recent peaks. The Nasdaq Composite is currently down 7.8 per cent from its closing high.
Capital Economics economist John Higgins said that growing reliance on external financing for the combined capital expenditure of hyperscalers is adding to concerns regarding the scale and structure of their spending. These four companies have accounted for more than a third of the capital expenditure by S&P 500 companies over the last 12 months.
Sahak Manuelian, managing director for global equities sales and trading at Wedbush Securities, told Reuters that the previous rapid increases in technology stock prices had made the sector susceptible to a major retreat.
The market decline also affected other assets, with silver falling 6 per cent and gold declining 3.5 per cent on Friday.