Stock Market Today, Oct. 16: Tech Stocks Plunge as AI Software Valuations Reverse
The S&P 500 (SNPINDEX:^GSPC) fell 1.07% to 7,661 as AI-related software stocks faced a sharp reversal, while the Nasdaq Composite (NASDAQINDEX:^IXIC) plummeted 2.15% to 26,140 on broad technology selling, and the Dow Jones Industrial Average (DJINDICES:^DJI) slipped 0.34% to 52,002, outperforming its peers to record its second straight weekly gain.
Gold prices rose 0.43% to $4,187.90 as of U.S. market close, the 10-Year Treasury yield declined to 5.10%, and Energy led sector gainers while Communication Services paced the decliners, followed by significant weakness in Technology.
Today’s biggest moves
Alcoa (NYSE:AA) shares jumped 5.80% on a third-quarter earnings beat, while Fox Factory (NASDAQ:FOXF) plummeted after announcing an unplanned CEO departure and a lower financial outlook.
Palantir Technologies (NASDAQ:PLTR) entered correction territory as software valuations pulled back, and Ford (NYSE:F) gained 2% as investors rotated into defensive blue chip names.
What this means for investors
Neocloud CoreWeave (NASDAQ:CRWV) ended the week down 25% after Goldman Sachs (NYSE:GS) released a note saying that hedge funds sold AI stocks at the second-fastest pace in over a year. The firm considered the move a “tactical rotation” away from smaller AI names (like CoreWeave) toward steadier AI names, such as the Magnificent Seven, or even non-AI stocks altogether.
Netflix (NASDAQ:NFLX) named former Disney (NYSE:DIS) chair Peter Rice its new chief content officer, but NFLX stock slid 3% anyway.
Lastly, Apple (NASDAQ:AAPL) announced that preorders for its foldable $1,999 iPhone Duo sold out within minutes today. While this looks like a promising development on the surface, some analysts and Apple experts think this may be more of a supply constraint than pure, unbridled demand for the next-gen iPhone.
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