Nasdaq falls over 1 per cent as AI spending concerns persist
The S&P 500 also closed lower on Monday while the Dow Jones Industrial Average recorded a gain.
The Nasdaq Composite declined 272.68 points, or 1.07 per cent, to 25,164.32 on Monday, according to a report by The Economic Times. The S&P 500 fell 37.80 points, or 0.50 per cent, to 7,542.27, while the Dow Jones Industrial Average rose 221.88 points, or 0.43 per cent, to 51,992.19.
Investors weighed falling oil prices, a new round of corporate earnings, and concerns regarding artificial intelligence (AI) spending by Big Tech companies. Apple shares slipped before its quarterly report, and Oracle shares fell following plans to raise $20 billion through a share sale and debt, Reuters reported.
Technology companies are facing scrutiny over the returns on their growing AI investments. The Nasdaq lost 5.3 per cent last month as concerns grew that spending on AI infrastructure is outstripping the cash these investments can generate.
Jake Dollarhide, chief executive of Longbow Asset Management, said Monday's recovery attempt reflected a buy the dip reaction. He stated that companies must realise there is a limit to spending and that at some point, there is no additional value add, only expense.
Falling crude prices provided relief after Iran indicated it was open to peace talks with the US. Meanwhile, US manufacturing activity increased in October, showing solid domestic demand, though investor caution remained ahead of Tuesday's US midterm elections.
