Dow Jumps Over 500 Points as Investors Rotate Away from AI Stocks

The Dow Jones Industrial Average surged on Thursday as investors shifted away from artificial intelligence-related stocks and moved toward sectors seen as offering more attractive valuations. The Dow gained 556 points, or 1.08%, while the S&P 500 rose 0.33% and the Nasdaq Composite edged up 0.08%.

The rotation came amid growing concerns that technology companies may be spending too aggressively on AI infrastructure. Investors also continued to assess US economic data showing persistent inflationary pressures, keeping the Federal Reserve’s interest-rate outlook in focus.

Shares of Seagate Technology and Western Digital extended their declines for the week, while SK Hynix also came under pressure and contributed to a sharp selloff in South Korea’s Kospi. Investors are becoming increasingly concerned about a potential memory-chip supply glut as Chinese producers expand their presence in the market.

Those concerns intensified after Tesla CEO Elon Musk said China could produce a large amount of RAM by 2028. Greater production capacity could increase competition and put additional pressure on pricing and profit margins across the global semiconductor industry.

Sentiment toward the AI sector was also weighed down by reports that Anthropic’s revenue reached US$16.8 billion in the third quarter. Despite the growth, some investors questioned whether the company’s revenue expansion was strong enough to justify the sharp gains seen in chipmaker valuations, prompting a broader rotation away from the AI trade and into other areas of Wall Street.(mrv)

Source : Newsmaker.id