The S&P 500 and Nasdaq suffered sharp declines on Thursday, primarily driven by Nvidia’s weak quarterly forecast that failed to sustain Wall Street’s AI momentum. Amid falling chip stocks, Nvidia’s gross margin outlook overshadowed its positive revenue expectations, prompting a slump that weighed heavily on the market.
Chipmakers Broadcom and Advanced Micro Devices also experienced losses, leading to a significant drop in the Philadelphia chip index. Wall Street’s AI enthusiasm cooled following China’s DeepSeek introducing low-cost AI models, and analyst predictions of Microsoft’s potential data center lease reductions raised concerns of AI overcapacity.
Beyond tech, the S&P energy index climbed as crude prices surged when President Trump revoked Chevron’s Venezuelan operating license. Economic sentiment dipped with increased jobless claims and slowed growth in the fourth quarter, stoking fears of an economic stall affecting stock trajectories. Other sectors showed mixed results, with Snowflake rising on positive revenue forecasts and Viatris falling after weak annual guidance.
(With inputs from agencies.)