Bloodbath on Wall Street as investors freak out over AI costs
Wall Street has had its worst day in months, with tech stocks leading the downward trend on the market.
The S&P 500 fell 1.8 per cent on Friday, making for the third straight week the market has gone backwards.
Wall Street has seen major losses in the past week. AP Photo/Yuki Iwamura
But the heaviest losses were on the tech-heavy Nasdaq composite, which fell a massive 2.8 per cent.
Today's losses cap off a dire October on the Nasdaq 100, with more than $2.84 trillion in market value wiped out.
The losses were driven by investors growing skittish about AI investment, which is yet to pay off for most major companies.
The biggest tech companies have spent extraordinary sums on building up AI infrastructure, but investors are worried the costs may not result in enough profit to make it worthwhile.
The biggest loser is Alphabet, the parent company of Google, which has lost more than a trillion dollars in value this month.
Nvidia, Meta, SpaceX and Amazon have also seen huge losses.
Social media company Reddit has had its worst day ever, losing more than a quarter of its value in a single day.
Ironically, Reddit is suffering because AI overviews are costing the site much of its search referral traffic.
The S&P 500 is now down three per cent from its record highs.
The Nasdaq is down 7.8 per cent from its highest point after its worst month since March last year.
Wall Street is well down on its record highs. AP Photo/Yuki Iwamura
But not all companies on Wall Street have been hard hit today.
Oil giants Chevron and ExxonMobil saw their numbers go up, as did toiletries aisle behemoth Colgate-Palmolive.
But Bitcoin is down sharply today, as crypto investors are spooked by a hack of Binance.
Hackers stole $8.9 billion from the cryptocurrency exchange, with North Korea believed to be the culprits behind the largest heist ever.
The losses on Wall Street come at a terrible time for Donald Trump, with voters heading to the polls for the midterm election on Tuesday.
Trump has touted the success of the share market as evidence of his success as president, even as voters feel the money is not ending up in their pockets.
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