The New York stock market ended lower on weakened investor sentiment toward artificial intelligence (AI) stocks. Selling continued as it became clear that the massive capital expenditure by AI-related big tech corporations had turned into a burden.
On the 5th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,908.72, down 592.58 points (1.2%) from the previous session. The Standard & Poor's (S&P) 500 fell 84.32 points (1.23%) to 6,798.40, and the Nasdaq slid 363.99 points (1.59%) to 22,540.59.
Alphabet, Google's parent, slipped 0.6% after an outlook suggested this year's AI-related capital expenditure will surge from last year. Cloud service corporations Microsoft (MS) and Amazon also fell 4.95% and 4.42%, respectively.
Nvidia fell 1.33% despite expectations it will benefit from expanded big tech AI investment, and Palantir plunged 6.83%.
Concerns that AI technology could lead to disruptive upheaval in the software (SW) industry pushed major SW firms lower. ServiceNow fell 7.6%, Oracle lost 6.95%, and Salesforce, Inc. dropped 4.75%.
Private equity, which has invested in the software industry, also fell in tandem. ▲ Ares Management (-11.19%) ▲ KKR (-5.35%) ▲ Blackstone (-5.73%) and other major Wall Street private equity listings extended sharp declines.
Wall Street analysts are skeptical that the astronomical AI capital expenditure will generate sufficient revenue relative to the investment.
However, most other sectors unrelated to tech also could not avoid losses.
Drugmaker Eli Lilly plunged 7.79% on news that a generic version of its obesity pill will be launched in the U.S. market. Cosmetics company Estée Lauder tumbled 19.19% after results fell short of market expectations due to tariff effects.