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Tech Slide Pulls Wall Street Lower After Fed Cut Signals Uncertainty

Investor caution deepened on costly AI plans alongside uncertain Fed guidance.

Overview

  • U.S. stocks closed down Thursday, with the Nasdaq off 1.57%, the S&P 500 down 0.99%, and the Dow lower by 0.23% as investors digested big-tech earnings.
  • Meta fell about 11% and shed roughly $200 billion in market value, while Microsoft declined nearly 3% after results and spending plans drew a wary response.
  • Analysts flagged rising AI outlays by major platforms, with aggregate annual spending approaching $100 billion and concerns mounting about delayed returns.
  • The Federal Reserve cut rates by 25 basis points to 3.75%-4.0%, yet Chair Jerome Powell said a December reduction is far from assured, pushing 10-year Treasury yields toward 4.09%-4.10%.
  • Nvidia remained a bright spot after topping $5 trillion in market value, European shares retreated with ParisCAC 40 down 0.53%, and a TrumpXi meeting produced limited deals on rare earths, soy, and some fentanyl-linked tariffs.