Nasdaq declines amid concerns about AI spending

Reuters

Saturday, July 25, 2026 0:20 | 1 minute read

The American Nasdaq index, dominated by technology stocks, fell at the close on Friday after investors sold shares of chip companies due to concerns about massive spending on artificial intelligence ahead of the next batch of earnings reports from mega-cap companies.

A drop in oil prices provided some support to Wall Street despite ongoing combat operations in the Middle East.

The S&P 500 index closed virtually unchanged, but the bigger impact came from the technology sub-index, which underperformed the broader market as chip stocks declined.

Investors are awaiting results from mega-cap companies such as Microsoft, Amazon, Meta, and Apple, with their enthusiasm waning after Alphabet, Google's parent company, late Wednesday announced a plan to increase capital spending even though it is spending more than it earns in revenue.

Read also: Chip wave breaks.. Why does expert Yardeni warn of an additional 12% drop?

Peter Andersen, CEO of Andersen Capital Management, said: "People are wondering: how do we explain all this spending, and how patient do we need to be before we see it reflected in real profits? The fear of missing out has become akin to the fear of massive overinvestment."

Data showed the S&P 500 index rose about 0.07% to close at 7413.30 points.

The Nasdaq Composite lost 0.63% to reach 24980.34 points.

The Dow Jones Industrial Average rose 0.46% to 51947.52 points.

Read also: Technology lifts European stocks from biggest loss in two weeks

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