A tough week for tech stocks may reflect a lack of investor confidence in artificial intelligence.
The Nasdaq Composite Index fell 3%, the Wall Street Journal reported, its worst week since President Donald Trump announced sweeping tariff plans in April.
Tech companies that have otherwise performed well this year have been hit the hardest, with Palantir's stock falling 11% this week, Oracle dropping 9% and Nvidia dropping 7%. These declines also occurred after Meta and Microsoft reported earnings that indicated plans to continue investing heavily in AI (both companies down about 4%).
“The valuation is overextended,” Cresset Capital's Jack Ablin told the WSJ. “Even the slightest bit of bad news becomes exaggerated. Expectations are already so high that good news alone is not enough to change things.”
Economic factors such as the ongoing government shutdown, deteriorating consumer sentiment, and large-scale layoffs are also likely weighing on the stock market. However, the tech-heavy S&P 500 and Dow Jones Industrial Average weren't as bad, falling 1.6% and 1.2%, respectively.