Wall Street faced a sharp selloff in tech stocks, driven by concerns that the recent frenzy around artificial-intelligence technology may have pushed prices too high. The S&P 500 dropped 1.8%, marking its worst day since June, while the Nasdaq composite fell 2.9%. The Dow Jones Industrial Average lost 572 points, or 1.1%. The Australian sharemarket is expected to open 4 points lower, with the Australian dollar trading at US70.29¢.
Intel’s stock plummeted 28.6%, its worst drop since 1974, after the chipmaker issued a profit forecast for the final quarter of the year that fell short of expectations. Amazon also declined 1.4% after reporting weaker-than-expected profits for the summer, raising concerns about its massive cash burn of $US42.4 billion over the past year. Alphabet’s stock had previously tumbled more than 12% after revealing significant cash outflows due to AI investments.
In the cryptocurrency sector, Binance saw a surge in withdrawals totaling $US3.64 billion as it returned online following a hack that impacted over $US6 billion worth of crypto. The exchange reported that it had covered 95% of the stolen assets. Meanwhile, Bitcoin’s price fell below $US77,000 from over $US86,000 earlier in the month. Coinbase Global and MicroStrategy both saw declines despite reporting stronger-than-expected quarterly results.
Outside of tech, stocks showed resilience, with ExxonMobil and Chevron climbing 2.2% and 1.8% respectively after reporting stronger profits. Mondelez International and Colgate-Palmolive also rose, driven by better-than-expected revenue and profit. The S&P 500 ended the day at 7,580.07, the Dow at 51,770.31, and the Nasdaq at 25,437.00. Treasury yields eased to 4.93%, while Brent crude oil prices rose 2.4% to $US113.43.