US stock indices closed lower on a day of selling pressure in technology shares, as investors weighed concerns over the outlook for artificial intelligence investment. The S&P 500 fell 0.31 percent, and the Dow Jones Industrial Average fell 0.25 percent. The Nasdaq 100 fell 1.4 percent.
Tech leads the decline
The S&P 500 closed at 7,720.22, down 23.76 points on the session. The Dow Jones closed at 52,342.56, down 132.54 points. Despite the index losses, more than 400 stocks in the S&P 500 rose.
Chris Larkin of ETrade, part of Morgan Stanley, said the day’s move reflected a pattern seen through most of October. AI investment concerns weighed on technology and communication services, he said, while having relatively little impact on other sectors.
Earnings and bond demand
Several large companies reported weaker-than-expected results or outlooks. Alphabet reported weaker sales, Amazon raised its AI spending, and Intel projected revenue below estimates. A group of AI-beneficiary stocks fell 2.7 percent.
Microsoft drew strong demand for a US$25 billion bond sale. Treasuries gained as a safe haven, with short-dated bonds performing best.
Fed and inflation signals
The Federal Reserve held its policy rate the day before. Ian Lyngen of BMO Capital Markets said recent data showed strong economic activity, but inflation pressures continued. The PCE price index rose 0.5 percent in September, the largest rise in six months.
Kevin Hassett, Director of the White House National Economic Council, said the Fed would likely act correctly if October inflation figures came in very high.
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Source: Federal Reserve
