US markets closed lower on Wednesday, with the Nasdaq Composite leading the losses, down 0.57% to 25,690.90. The S&P 500 fell 0.14% to 7,498.96, and the Dow Jones Industrial Average slipped 0.01% to 52,218.58. This marks a second straight day of declines for tech stocks, as investors grow increasingly skeptical about whether the significant investments in artificial intelligence will yield the expected profits.
Several prominent tech companies experienced drops. Salesforce plummeted more than 4%, while IBM and Microsoft also saw their shares decline. Google's parent company, Alphabet, fell 0.8% and then 1.5% and 1% on consecutive days, particularly after reporting quarterly revenue of $119.8 billion. Despite healthy revenue growth, investors remained cautious about companies' broader outlooks, demanding concrete evidence that AI spending will translate into unprecedented profits. Chipmaker NVIDIA, however, rose more than 2% to close at $212.03, fueled by optimism for AI-related chip demand.
Adding to investor anxiety were rising crude oil prices, which reignited inflation concerns. Brent crude settled at $95.50 per barrel, and WTI crude futures traded around $88 per barrel, both reaching their highest levels in about six weeks. Concerns about potential interest rate hikes also loom, with traders betting on a nearly 90% chance the Federal Reserve will raise its federal funds rate by year-end, up from 57% just a week prior. Economists forecast that US consumer inflation could accelerate to 4.1% in May from 3.8% in April, driven by increased energy costs.
