Market Turmoil: AI Expenditures Shake Tech Giants, Investors on Edge

US stock markets experienced a slump on Thursday, driven by major tech companies Meta Platforms and Microsoft whose stocks fell over concerns of rising AI costs. Investors, already apprehensive about the Federal Reserve's monetary policy, grew wary of future stock performance.

Meta's shares plunged by 12.1%, marking its most significant drop in three years, as it announced notably higher capital expenditures for the upcoming year owing to investments in artificial intelligence. Meanwhile, Microsoft's shares dipped 2.3% following its report of record capital spending and anticipated higher costs.

In contrast, Alphabet, Google's parent company, saw a 5.5% rise due to strong growth in its advertising and cloud sectors. As traders eye further results from tech giants such as Apple and Amazon, the Federal Reserve's recent quarter-point rate cut added to market uncertainty.