Nasdaq Slides Toward Correction as AI Spending Faces Scrutiny
The index fell more than 10% below its October record close as investors questioned AI infrastructure spending and data-center expansion.
Key takeaways
- The Nasdaq was more than 10% below its October 6 record close in Thursday trading.
- Investors weighed concerns about returns on AI spending and scrutiny of data-center expansion.
- The Nasdaq Composite was down 5.09% as of 15:50 UTC Thursday.
The Nasdaq Composite was on course for a correction Thursday after falling more than 10% below its record closing high of 27,599.89 on October 6. CNA reported the index had dropped nearly 4% to 24,712.60 during trading.
As of 15:50 UTC Thursday, the Nasdaq Composite stood at 24,425.94, down 5.09% from its previous close. A 10% decline from a recent record close is widely considered a correction, CNA reported. It would be the index’s second correction this year.
Investors were concerned that the Democrats’ sweeping election victory could bring greater scrutiny of data-center expansion and AI infrastructure investment. Chipmakers and companies tied to data centers fell, while the Nasdaq’s losses erased gains from the previous session.
Questions about how quickly AI investments will generate profits have also weighed on sentiment. Several large technology companies are tapping debt markets to fund planned spending on data centers, chips and other infrastructure, CNA reported.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
