Tech Giants Tumble Amid Surge in AI Spending: Wall Street Update

Wall Street closed lower as tech giants, including Microsoft and Amazon, saw significant declines. Alphabet's plans to double AI spending exacerbated investor concerns. The session saw substantial drops across tech stocks, wider volatility, and a shift towards more affordable investments.

In a significant downturn for Wall Street, major tech stocks pulled markets lower, with the Nasdaq reaching its lowest since November. Microsoft's shares dropped 5%, while Amazon suffered a 10% post-bell decline, following Alphabet's announcement to double its AI capital expenditure, causing investor apprehension.

Other tech heavyweights like Oracle and Palantir also registered substantial losses at 7% and 6.8% respectively, as the market reacted to further AI-driven spending cycles. The session spotlighted investor wariness towards the heavy AI investment strategies, with Nvidia, another key tech player, dipping 1.4%, despite potential long-term benefits.

As investors reconsider the hefty investments made by tech leaders in the AI domain, the market witnessed a gravitation towards cheaper stocks. Nine of the 11 S&P 500 sectors saw declines, with shifts noted in consumer discretionary and materials sectors. The broader market's adjustment reflects ongoing volatility and strategic repositioning amid the tech sector's fluctuating fortunes.

(With inputs from agencies.)