Technology stocks declined, dragging down the broader market. Microsoft's earnings report sparked concerns over massive artificial intelligence-related expenditures. The tech-heavy Nasdaq 100 Index closed down 0.5%. Microsoft's stock price plunged 10%, marking its largest single-day drop since 2020. The company's spending surged to a record high, while sales growth in its cloud business slowed, leading investors to worry that its AI investments might take longer than expected to yield returns. "Investors are re-evaluating the AI trade and are therefore rebalancing their weightings in big tech stocks within their portfolios," said Matt Maley, Chief Market Strategist at Miller Tabak & Co. Meta's stock price rose 10%. Analysts viewed the better-than-expected revenue guidance from the Facebook owner as providing support for its substantial artificial intelligence spending. Investors were once again assessing mega-cap tech stocks after Thursday's market close. Apple reported holiday-quarter revenue that exceeded Wall Street expectations, buoyed by strong demand for the iPhone 17, growth in its services business, and a market recovery. Amazon, which is scheduled to report earnings next week, is reportedly in talks to invest up to $50 billion in OpenAI. As the risk of a US government shutdown loomed, former President Trump and Democratic leaders were nearing an agreement. Official data showed the US trade deficit widened in November, influenced by a rebound in imports and a decline in exports. The number of Americans filing new claims for unemployment benefits changed little last week, providing further evidence that the labor market is stabilizing. At the close of trading, the S&P 500 Index was down 0.1% at 6,969.01 points; the Dow Jones Industrial Average was up 0.1% at 49,071.56 points; the Nasdaq Composite Index was down 0.7% at 23,685.12 points; the Nasdaq 100 Index was down 0.5% at 25,884.29 points; and the Russell 2000 Index was essentially flat at 2,654.776 points.
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