US stocks swoon as AI trade takes a beating
A double whammy of negative AI headlines and tougher tariff talk sunk stocks on Wednesday.
The S&P 500 fell 1.1%, the Russell 2000 gave back 1%, and the tech-heavy Nasdaq 100 slumped 1.8%.
Tech was the worst S&P 500 sector ETF, down 2.2%, while consumer discretionary fell more than 1%. Staples was the biggest gainer.
TD Cowen analysts, whose report on Microsoft’s dimming demand for data center projects last month weighed on AI infrastructure and energy names, said that the company had walked away from 2 gigawatts’ worth of data centers. The bottom of the S&P 500 leaderboard was a who’s who of AI-adjacent names: Super Micro Computer, Arista Networks, Vistra, Nvidia, Quanta Services, GE Vernova, and Monolithic Power Systems were all among the 10 worst-performing constituents on the day.
Meanwhile, President Trump pledged that auto tariffs are coming. Ford was relatively unbothered, while General Motors tanked.
On the other hand, some all-round good news for gaming:
GameStop was up double digits after posting its largest operating profit since Q4 2017 and announcing a tweak to its investment policy to allow the purchase of bitcoin.
Nintendo also rallied as Goldman Sachs resumed coverage of the company with a buy, expecting strong sales from its Switch 2 console.
Dollar Tree’s commitment to low prices is admirable: the company announced that it’s selling Family Dollar, which it bought a decade ago for $9 billion, for $1 billion.
