The New York stock market was mixed on the 29th (local time) as software shares centered on Microsoft (MS) plunged.
After the close the previous day, Microsoft's quarterly results confirmed a slowdown in the cloud institutional sector, sparking concerns that the spread of artificial intelligence (AI) could encroach on the business models of existing software firms. As a result, MS shares tumbled 9.99% on the day.
The MS plunge spread across the software sector. Salesforce, Inc. fell 6.09% and ServiceNow dropped 9.94%, with shares of major software service corporations sliding one after another.
In contrast, Meta, which has been aggressively investing in AI infrastructure, surged 10.40% as the results released the previous day beat market expectations. The outcome reflects a positive assessment of large-scale investment in AI data centers.
By index, tech weakness stood out. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished up 55.96 points, or 0.11%, at 49,071.56. The Standard & Poor's (S&P) 500 index closed down 9.02 points, or 0.13%, at 6,969.01, while the tech-heavy Nasdaq composite ended down 172.33 points, or 0.72%, at 23,685.12.
John Praveen, co-chief investment officer (CIO) at investment firm Paleo Leon, told Reuters, "MS results were disappointing," and noted, "There are market concerns that AI investment could encroach on software firms' existing revenue models."