AI Spending Jitters Shake U.S. Markets

The S&P 500 and Nasdaq slipped due to concerns about escalating AI-related expenditures, impacting investors worried about U.S. Federal Reserve's monetary policy decisions. Meta and Microsoft shares fell sharply, while traders recalibrated expectations for future U.S.-China trade developments and Fed rate cuts.

The S&P 500 and Nasdaq witnessed declines on Thursday as concerns about rising AI expenditures hit major firms like Meta and Microsoft, stirring investor unease surrounding the U.S. Federal Reserve's monetary policy trajectory.

Meta saw an 11.8% drop, the most significant fall in three years, due to increased capital expense forecasts attributed to AI investments. Concurrently, Microsoft shares dipped 3.5% following revelations of an unprecedented $35 billion capital expenditure for its first fiscal quarter.

Investors are now particularly focused on upcoming earnings from Apple and Amazon, even as Google-parent Alphabet surged due to strong growth results. Meanwhile, the U.S. financial landscape remains cautious amid Federal Reserve policy speculations and U.S.-China trade negotiations.

(With inputs from agencies.)