Investors Brace as AI Costs Impact Markets: Nasdaq Tumbles Over 2%

World stock indexes fell on Thursday mainly due to warnings about rising AI costs from Meta and Microsoft, leading to a drop in Nasdaq by over 2%. The dollar weakened slightly, and traders anticipate a Fed rate cut next month. Key economic data and election results are in focus.

On Thursday, global stock indexes took a hit, with the Nasdaq dropping over 2%. Tech giants Meta Platforms and Microsoft issued warnings regarding rising costs associated with artificial intelligence, further fueling investor concerns about hefty AI expenditure. The dollar showed a slight dip following U.S. data that provided little indication for changes in Federal Reserve policy.

Investors are closely monitoring forthcoming earnings reports from Amazon and Apple. Recent data showed an unexpected increase in U.S. consumer spending in September, indicating robust economic growth as the year comes to an end. Meanwhile, tensions in the foreign exchange market rose as the dollar weakened against the yen after Bank of Japan adopted a less dovish stance than predicted, while the euro gained strength from higher-than-expected inflation data in the European bloc.

In the U.S. market, major indices like the S&P 500 and Dow Jones Industrial Average registered declines. Meanwhile, cryptocurrency values and gold prices faced volatility, while oil prices experienced an uptick. The investment community remains vigilant over upcoming key economic indicators and the U.S. presidential election.

(With inputs from agencies.)