Tariff Woes Ripple Through S&P 500 Amid AI Stock Slump
The S&P 500 dropped amid losses in AI-related stocks like Dell and Nvidia, as investors assessed inflation data linked to tariffs. Dell's projected high manufacturing costs caused significant declines. Despite consumer spending surging, rate cuts are anticipated. Alibaba shares soared, while Marvell and Caterpillar faced setbacks.
On Friday, the S&P 500 fell as major AI-related stocks, including Dell and Nvidia, recorded substantial losses. Investors closely analyzed inflation data revealing that tariffs have begun influencing prices. Dell's shares plummeted by almost 9% due to high manufacturing costs for AI-optimized servers overshadowing the company's promising demand forecasts.
Nvidia, another key AI player, saw its shares dip 3.4%, marking its third consecutive day of decline. Although its recent quarterly report fell short of expectations, it confirmed robust spending on AI infrastructure. Despite an increase in U.S. consumer spending in July, signs of domestic demand do not deter expectations of Federal Reserve interest rate cuts amid weakening labor market conditions.
While some sectors like healthcare and consumer staples rose, the S&P 500's technology index dropped 1.63%. In contrast, Alibaba's U.S. shares jumped 13% following strong quarterly growth in its cloud business. As the U.S. stock market anticipates a possible rate cut in September, shares saw mixed performances with varying sectoral impacts.
(With inputs from agencies.)
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