Nasdaq Faces Turbulence as Tech Stocks Lead Losses Amid AI Concerns
The Nasdaq experienced significant losses led by a downturn in technology stocks. Despite Nvidia's strong quarter results, investor concern over AI trade dampened enthusiasm as broader tech valuations faced scrutiny. Notable declines were seen in the Philadelphia SE Semiconductor Index, affecting major companies like Alphabet and Amazon.
The Nasdaq faced a sharp downturn on Thursday as technology stocks, once the rally's backbone, struggled to maintain momentum. Despite stellar quarterly results from Nvidia, a crucial player in AI, investor concern over the AI market resurgence led to a 4.5% drop in its shares.
These developments come as tech valuations face increased scrutiny. Jake Johnston, portfolio manager at Advisors Asset Management, noted that the tech premium is diminishing due to overvaluation concerns. The Philadelphia SE Semiconductor Index dropped 3.4%, jeopardizing its impressive 10-week winning streak.
Elsewhere, while heavyweight tech stocks like Alphabet and Amazon saw declines, the S&P 500 software and services index managed a slight recovery. Crude oil prices and energy stocks showed resilience, reversing initial declines. Investors also followed geopolitical discussions, as U.S. and Iran engaged in talks aimed at nuclear dispute resolution.
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