Wall Street Tumbles Amid AI Cost Concerns

Wall Street experienced a downturn, influenced by warnings from Microsoft and Meta about the rising costs of AI. Both companies saw declines, emphasizing the challenges of maintaining investor satisfaction amidst expensive valuations. Economic indicators and labor data also played a role, as investors anticipated Fed moves.

Wall Street took a hit on Thursday, weighed down by concerns over soaring AI costs highlighted by major players Microsoft and Meta Platforms. Despite surpassing earnings expectations, Meta saw a 2.8% dip while Microsoft's shares dropped 5.1%.

The rise in the 10-year Treasury yield added pressure, aligning with a slight increase in consumer spending and inflation news that matched predictions. Analysts suggest these economic shifts might influence Fed's decision on interest rates.

Investor sentiment was further dampened by disappointing forecasts from other tech giants, and a surge in the VIX indicates anticipation of increased market volatility, compounded by upcoming corporate earnings reports and political events.

(With inputs from agencies.)