Technology shares reversed early gains to move lower, weighing on the Nasdaq as investors worried about hyperscaler spending on artificial intelligence and who foots the bill. Those fears outweighed upbeat signals on AI demand from Micron and Qualcomm.
The Nasdaq was on track for its biggest monthly decline since March 2025.
Apple slid after hiking prices for iPads and MacBooks to counter surging memory and storage chip costs. Shares of Nvidia, Microsoft, and Alphabet were also down.
Micron soared after its earnings and forecasts beat Wall Street estimates. Still, concerns over debt-backed spending by hyperscalers and fears of a more hawkish Federal Reserve kept weighing on the market this week.
“The market realized that one company’s blowout earnings and revenues mean someone else is paying the price for that down the line,” said Carol Schleif, chief investment officer at BMO Family Office. “For Micron to generate the kinds of earnings and revenues they do, it’s coming out of somebody else’s hide.”Also Read | US inflation tops 4% for first time in three years, keeping Fed hike in play Memory chipmaker Sandisk also soared. Qualcomm, Western Digital and Seagate Technology all popped. According to preliminary data, the S&P 500 lost 1.05 points, or 0.01%, to end at 7,357.17 points, while the Nasdaq Composite lost 120.07 points, or 0.47%, to 25,356.57. The Dow Jones Industrial Average rose 87.33 points, or 0.17%, to 51,936.23. The Philadelphia SE Semiconductor index rose and was on track for its strongest quarter on record, according to LSEG data.
The U.S. Department of Commerce released a slew of data on Thursday.
U.S. inflation increased further in May, breaking above 4.0% for the first time in three years on higher energy prices, and potentially drawing the Federal Reserve closer to raising interest rates.
In response to rising price pressures, traders anticipate the Fed will lift interest rates by at least 25 basis points before the year-end, according to LSEG data.
A final reading of first-quarter GDP data showed the economy grew by 2.1%, compared to a prior estimate of 1.6%. Meanwhile, jobless claims data showed a higher-than-expected fall in the number of Americans filing for unemployment benefits.
“Inflation came in toasty, like people expected it to, but not super hot,” Schleif said. “The suspicion is, with oil prices coming down, you’ll see continue to cool somewhat as we go into the summer and fall months.”
Oil prices fell below pre-war levels this week.
Among other movers, Bio-Techne Corp jumped after Germany’s Merck KGaA agreed to acquire the biotech firm for $73 per share in cash, representing a total enterprise value of about $11.3 billion.
