Nasdaq fell 2.1% on Thursday, pulling the S&P 500 1.3% lower and the Dow 279 points, or 0.5%, into a loss. The slide was triggered by a Reuters‑reported spike in AI‑related spending chatter, which has unsettled investors about the sustainability of the recent tech rally.
Tech stocks that carried the index—Microsoft, Alphabet, Nvidia—each dipped around 1.5% to 2%, after analysts flagged that guidance on AI‑driven revenue for the next quarter may be softer than the 12% YoY growth seen last year. Bloomberg cites that AI‑budget forecasts from the top 10 AI vendors fell 7% YoY, a sharp contrast to the 19% rise in the sector’s revenue in Q1. Meanwhile, the Nasdaq’s trailing 12‑month average for AI‑related R&D expense sits at ₹4,200 crore, about ₹1,200 crore higher than the market‑average tech spend.
Oil prices added a new layer of volatility: Brent crude futures climbed 3% to $112.45 a barrel, while WTI surged 2% to $99.95, as the New York Times reported that Iran and the U.S. may re‑launch strikes against Tehran after the mid‑term elections. The spike in oil fed into a 0.7% rally in the Energy Select Sector SPDR, offering a brief counterweight to the tech sell‑off.
Labour data added a muted backdrop: U.S. initial unemployment claims fell to 194,000 in the week ended Oct. 17, a 6,000‑point drop from the previous week and the lowest level since 1969. The Labor Department’s figure, released on Thursday, nudged headline analysts to keep a close eye on consumer spending, which could influence the broader market’s risk appetite.
As the market digests the day’s moves, investors are now turning to the Q2 earnings calendar. Infosys, Dr. Reddy’s, and Tata Motors are slated to report in the next few days, with analysts expecting a 4% YoY net‑profit increase across the tech and auto sectors. Market watchers will be watching the earnings releases for clues on how AI spending and geopolitical tensions might shape the coming quarter’s growth trajectory.