Slumping AI and chip stocks pulled the S&P 500 and Nasdaq lower on Thursday, even as most of Wall Street climbed on strong earnings. Nvidia fell 2.5% to become the heaviest weight on the S&P 500, while the Dow held slightly higher.
A renewed slide in chipmakers left U.S. stock indexes split on Thursday, with the S&P 500 falling 0.2% a day after it pulled within 0.5% of the all-time high it set last month. The Nasdaq composite was 0.7% lower, while the Dow Jones Industrial Average was up 102 points, or 0.2% as of 11:45 a.m. Eastern time.
Nvidia leads the AI names lower
The drop concentrated in the artificial-intelligence winners that have driven the market. Nvidia fell 2.5%, the heaviest weight on the index because a 1% move in its stock packs more punch on the S&P 500 than any other company. Other AI names gave back some of their gains: Micron Technology fell 5.7%, Sandisk dropped 10.6%, and Western Digital sank 9%.
Those stocks have been under pressure for weeks on worries that their prices shot too high and that demand for computer memory and processors may not hold if AI produces less profit and productivity than promised. The selling continued even though Taiwan Semiconductor Manufacturing Co. reported a stronger quarterly profit than analysts expected — its shares in Taiwan rose 1.2%, but its U.S.-listed stock fell 2.2%.
Earnings lift the rest of Wall Street
Most stocks still rose after several large companies beat profit estimates. Abbott jumped 11.1% and raised its full-year earnings forecast, while UnitedHealth Group climbed 3.5% on better-than-expected results.
The pressure spread overseas, where drops for Samsung Electronics and SK Hynix dragged South Korea's Kospi down 6.4%. An interest-rate hike by the Bank of Korea, its first since 2023, also weighed on Seoul. Meanwhile, worries are rising that the Federal Reserve and other central banks may have to raise rates to rein in the effects of expensive oil, which can keep a lid on inflation but also slow the economy.
Source: Yahoo Finance / The Associated Press
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