NEW YORK — AI stocks took a beating on Thursday, and the rest of Wall Street went with them. The S&P 500 fell 3.5%, according to The Associated Press, giving back the gains from Wednesday, the market’s best day in three months.
By 12:26 p.m. Eastern time the Dow Jones Industrial Average was off 1,433 points, a drop of 2.7%, the AP reported. The Nasdaq composite was down 4.7%.
Chip stocks lead the slide
The selling centered on companies tied to the buildout of AI data centers. Nvidia dropped 7.5% and was the heaviest weight on the S&P 500, a day after falling 3.2%.
Advanced Micro Devices tumbled 14.6%. CoreWeave, which rents access to AI chips over the cloud, fell 12.1%, and GE Vernova, which helps power data centers, sank 6.1%.
Chip and data center stocks have swung for months. Borrowing costs have made new construction more expensive, and Tuesday’s midterm elections added a fresh worry.
Democrats won across the country, raising the possibility that governments could force pauses in data center construction. Fewer centers would mean fewer purchases of AI chips, power and other products the buildout has been drawing in.
A few gainers in a broad decline
Every sector in the S&P 500 lost ground. Two strong earnings reports still stood out against the slide.
AppLovin jumped 28% after its revenue and profit beat analysts’ expectations. The marketing platform also approved up to $3.2 billion in additional share buybacks, taking the program’s total potential value to $3.6 billion, the AP reported.
Tapestry rose 6.6%. The company behind Coach and Kate Spade delivered a stronger profit than expected and raised its revenue and earnings forecasts for the fiscal year.
Oil rises, Treasury yields ease
Markets abroad were mixed. South Korea took the worst of it, with the Kospi down 5.3% on losses in tech and AI-linked shares. Japan’s Nikkei 225 sank 1.8%.
In London, shares eased 0.4% on the FTSE 100 after the Bank of England raised its main interest rate for the first time in three years. The bank said its next moves will largely hinge on the war with Iran, which has pushed oil prices and inflation higher worldwide.
“We’ve seen encouraging news in the past 48 hours,” Bank of England Gov. Andrew Bailey said at a press briefing.
“The best thing that can happen is to resolve the conflict in the Middle East; there’s no question about it.”
Oil moved the other way. A barrel of Brent crude added 2.6% to reach $97.11, clawing back some of Wednesday’s nearly 9% fall.
Bond investors headed for safety. The yield on the 10-year Treasury note eased to 4.83%, from 4.90% late Wednesday. It had stood at 4.95% on election night and above 5.30% last month.
The drop came even with encouraging economic news. Fewer U.S. workers applied for unemployment benefits last week, and a separate report suggested worker productivity improved more over the summer than economists had expected, the AP reported.
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