Dow Hits Record High as Tech Stocks Plummet on AI Profitability Concerns

The stock market closed mixed on August 5, with the Dow Jones Industrial Average hitting a record high while major technology stocks slid. The Dow rose 263.24 points to close at 54,349.12, marking its third consecutive record high.

However, the gains were not broad-based across the market. The S&P 500 fell 12.97 points to 7,723.55, while the tech-heavy Nasdaq Composite declined 221.55 points to 26,363.44.

The divergence reflected investor concerns about the profitability of massive artificial intelligence investments, particularly among the largest technology companies. Alphabet dropped 4% and Microsoft slipped 1.1%, according to the AP.

Analyst Brian Therien noted that 'the market appears to be moving from rewarding companies for AI spending to assessing the revenue and earnings that these investments can generate.'