Wall Street mixed as Nasdaq drops 2.6% on AI and chip sell-off

U.S. stocks closed mixed Thursday, with the Dow Jones Industrial Average edging up 0.02% while the Nasdaq plunged 2.60%, its steepest drop since early June, amid heavy selling of AI and chip stocks. The S&P 500 fell 1.21% as investors worried about AI investment returns. Meta Platforms dropped 7.0% despite beating estimates, while Tesla fell 3.1% and chipmakers Intel, AMD, SanDisk, and Marvell each declined over 8%. The Philadelphia Semiconductor Index tumbled 6.7%. Geopolitical tensions added pressure, with oil prices hitting five-month highs after reports of potential U.S.-Israel strikes on Iran. Meanwhile, the Fed is expected to hold rates steady at its October meeting, with strong labor market data showing jobless claims at 194,000.