U.S. tech-heavy Nasdaq and the S&P 500 faced significant pressure following weaker-than-expected earnings from major tech companies, particularly Microsoft and Meta (formerly Facebook). Both companies reported increased costs related to AI and other advanced technologies, which cut into their profits and disappointed investors. The Nasdaq dropped by around 1.37%, reflecting market concern over tech sector performance. Similarly, the S&P 500, which includes many tech-related companies, also saw declines as investors grew wary of rising operational costs in the sector .
These earnings reports highlight a broader trend of technology companies facing high expenditures on AI development, cloud computing, and other innovations that, while promising long-term returns, present immediate cost burdens. This cautious sentiment around tech stocks is expected to influence broader market dynamics, as the technology sector has been a major driver of recent stock market gains.
