Nasdaq drops 2.6% as tech and chip stocks sell off on AI cost worries

Wall Street's Nasdaq index plunged 2.6% on Thursday due to a new sell-off in technology and semiconductor stocks, driven by concerns over the cost of artificial intelligence investments. The Dow Jones closed nearly flat with a 0.02% gain, while the S&P 500 fell 1.21%. Meta Platforms lost about 7% despite strong earnings, and the Philadelphia Semiconductor Index dropped 6.7%, its worst daily decline since June 23, with Intel, AMD, Sandisk, and Marvell each falling over 8%. Rising oil prices at five-month highs and Middle East geopolitical tensions added to inflation and interest rate worries. In contrast, Spotify, Blackstone, Lockheed Martin, and Procter & Gamble posted gains following their earnings reports.