Market Volatility as AI Costs Rise and Fed Decisions Loom

Global stock indexes fell as Meta and Microsoft highlighted rising AI costs. The Nasdaq dropped over 2%, while key earnings reports influenced market dynamics. Concerns about the AI investment timeline persist. The U.S. dollar weakened slightly, and traders anticipate Federal Reserve decisions, amidst significant economic and employment data releases.

On Thursday, the global stock market experienced a significant drop, with the Nasdaq plummeting over 2%. This downturn was largely influenced by rising artificial intelligence costs, as highlighted by tech giants Meta Platforms and Microsoft in their recent earnings reports. The announcements have sparked investor concern about the projected return on substantial AI investments.

Meta, Facebook's parent company, saw its shares dip 4.1%, while Microsoft's shares fell 6%, negatively impacting both the Nasdaq and S&P 500 indices. Kurv Investment Management's CEO, Howard Chan, noted that market adjustments stem from future expectations, suggesting that infrastructure related to AI remains promising despite current hurdles.

Amid this financial turbulence, Amazon.com shares surged by 4.5% after outperforming Wall Street's third-quarter profit and sales forecasts. However, Apple shares saw a 2% decline. Meanwhile, economic growth in the U.S. saw a boost from increased consumer spending, although concerns linger related to labor costs and upcoming Federal Reserve meetings, adding layers of complexity to market proceedings.

(With inputs from agencies.)