Tech Turbulence: AI Stocks Stir Wall Street

Wall Street experienced mixed trading, as technology stocks dragged while investors awaited Nvidia's results for AI demand insights. Concerns about AI infrastructure oversupply from Microsoft's lease reductions, economic growth uncertainty, and inflation caused further market volatility. Tech sectors struggled, while healthcare gained, amid a focus on inflation data and economic forecasts.

In a volatile session on Wall Street, technology stocks emerged as the primary laggards. Investors were poised for Nvidia's anticipated results, hoping to glean clues about the future demand for artificial intelligence (AI) technology. Despite the turbulence, the Dow and S&P 500 posted minor gains, whereas the tech-laden Nasdaq composite tumbled.

Adding to the uncertainty, a report from TD Cowen indicated that Microsoft has rescinded several data center leases across the U.S., hinting at a potential surplus in AI infrastructure. This led to concerns over whether tech firms have overinvested in AI. Microsoft remains committed to its $80 billion annual investment but is considering strategic adjustments in infrastructure deployment.

Market jitters were compounded by weak economic data, a pessimistic outlook from Walmart, and doubts surrounding AI, particularly after the release of low-cost models from China's DeepSeek. Meanwhile, the healthcare sector led gains among the S&P 500 sectors, up 1%, as market participants awaited crucial inflation data that could influence Federal Reserve interest rate decisions.

(With inputs from agencies.)