Tech Giants Take a Tumble: What's Shaking Up Wall Street?

Wall Street is feeling the heat as tech stocks, once the darlings of the market, are taking a nosedive. The S&P 500 dropped 1. 2% from its record high, while the tech-heavy Nasdaq composite fell 1. 8%. The Dow Jones Industrial Average wasn't spared either, shedding 266 points from its recent peak. Broadcom, a major player in the chip industry, saw its stock plummet 10. 5% despite reporting better-than-expected profits. Analysts praised the company's strong performance, with CEO Hock Tan highlighting a 74% surge in AI semiconductor revenue. However, investors seem wary of Broadcom's financial forecasts and the company's rapid stock growth, which has already surged 75. 3% this year. Oracle also felt the pinch, dropping nearly 11% after reporting stronger profits. Doubts linger about the company's heavy investment in AI technology and how it plans to fund these ventures. These concerns are not unique to Oracle; they reflect broader anxieties about the AI industry's future. Nvidia, another AI powerhouse, fell 2. 5%, adding to the market's woes. Meanwhile, the bond market is also putting pressure on stocks, with the yield on the 10-year Treasury rising to 4. 19%. Interestingly, while tech stocks are stumbling, other sectors are gaining ground. The Dow Jones Industrial Average, which has fewer tech stocks, is up 1% for the week. This shift suggests that investors are looking beyond tech for opportunities. The Federal Reserve's recent interest rate cut has boosted investor optimism. Fed Chair Jerome Powell's comments eased fears about further rate hikes, providing some relief to the market. Travel-related stocks are also on the rise, with Southwest Airlines and Norwegian Cruise Line seeing gains. Lululemon Athletica led the S&P 500 with an 11. 1% jump after reporting strong earnings and announcing a leadership change. Internationally, markets showed mixed results. European indexes fell, while Asian markets saw significant gains, with Hong Kong and Tokyo leading the way.