The final results of the session indicate that the Dow Jones Industrial Average fell by 0.23% to 47,522.12 points, the tech-heavy Nasdaq Composite Index dropped 1.57% to 23,581.14 points, and the broader S&P 500 decreased by 0.99% to 6,822.34 points.
“The weakness observed in Meta and Microsoft served as a signal to moderate the enthusiasm surrounding AI,” Patrick O’Hare of Briefing.com stated to AFP.
The two major American companies released quarterly reports on Wednesday evening, which were poorly received by investors.
Meta, the owner of Facebook, Instagram, and WhatsApp, was the most affected, with its shares falling 11.33% to $666.47 on Thursday, wiping out more than $200 billion in market value.
Microsoft also declined by 2.92% to $525.76.
“This is by no means a sector collapse, but rather a long-anticipated profit-taking phase for a group of companies that experienced explosive growth,” analyzed Patrick O’Hare.
Tech giants are engaged in an AI race, ready to invest increasingly large sums each year, now nearing $100 billion.
The market “is increasingly concerned that it will take some time before these companies see returns on these substantial investments,” Patrick O’Hare observed.
In the commercial realm, investors were not particularly excited about the meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping.
Certainly, “the general outline of the agreement reached was largely in line with expectations,” noted O’Hare.
However, the analyst believes “there remains uncertainty about the future of this relationship, as both sides, the United States and China, have shown readiness” to resume their trade war “whenever deemed necessary.”
Market optimism was somewhat dampened by comments from U.S. Federal Reserve Chairman Jerome Powell, who said on Wednesday that a rate cut in December was far from certain.
The institution reduced its interest rates on Wednesday for the second consecutive time.
On the bond market, the yield on the 10-year U.S. Treasury rose further, trading around 4.09%, compared to 4.06% at Wednesday’s close.
In business news, the online marketplace eBay (-15.88%, to $83.73) stumbled, failing to satisfy investors with its predictions for the next quarter.
Nonetheless, its results for the last quarter, from July to September, exceeded expectations in terms of both earnings per share and revenue.
Moderna (+13.93%, to $28.14) benefited from press reports suggesting a possible acquisition by a major pharmaceutical company.
