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Tech Stocks Reel Amid AI Worries and Fed Shutdown Fears
30 Jan
Summary
- Gold and silver prices experienced significant drops.
- Microsoft shares fell sharply due to AI disruption concerns.
- US government shutdown risk increased after a Senate vote.
Precious metals experienced significant price swings on Thursday, with Spot Gold and Silver prices correcting approximately 4% and 5% respectively from their intraday record highs. The US Dollar index also saw a dip, falling back to 96 levels after a brief recovery. Wall Street benchmarks presented a mixed and volatile trading day, ultimately closing on either side of the flat line, though all indices recovered substantially from their intraday lows.
Microsoft emerged as a major drag on the Nasdaq and S&P 500, recording a 10% drop, its worst single-day decline since 2020. This fall, along with others in software names like ServiceNow, Oracle, and Salesforce, was attributed to investor concerns that artificial intelligence could disrupt established business models. Despite strong quarterly results, ServiceNow's stock fell 10%, contributing to the iShares Expanded Tech-Software Sector ETF entering bear market territory with a 22% correction.
Adding to market volatility, the US Senate failed to pass a procedural vote on a government funding package, increasing the likelihood of a government shutdown starting Saturday at 12:01 AM Eastern Time. This political uncertainty, coupled with a re-evaluation of the AI investment theme by investors, contributed to the day's market movements. Oil prices also crossed $71 intraday, a level not seen since September of the previous year.
