US Stocks Trim Gains Amid Strong Pressure on Tech Sector

New York | EcoPulse24

US stocks trimmed most of their early gains during Monday's session as the initial wave of optimism faded amid ongoing pressure on technology stocks and increasing fears regarding the feasibility of large, debt-funded investments in artificial intelligence.

The S&P 500 and Dow Jones Industrial Average hovered near stability, while the Nasdaq Composite fell by about 0.5%, impacted by the weak performance of major tech stocks. This decline came as concerns continued over profit margins and high financing costs for large-scale AI projects, making the tech sector one of the weakest performers alongside the energy and telecommunications sectors.

Losses were led by AI-related tech companies, with Broadcom's stock dropping by more than 4%, continuing its sharp decline of 11.4% on Friday. Oracle's stock fell by 3.7%, Salesforce dropped by about 2.9%, and ServiceNow's stock plummeted over 10% following reports that the company is considering a major acquisition deal, in addition to a downgrade from analysts at KeyBanc.

The pressure extended to other giant tech stocks, with Apple's shares decreasing by 1.4%, Microsoft by about 0.8%, Alphabet by 0.3%, and Amazon by approximately 0.9%. Conversely, some stocks defied the general trend, with Nvidia's stock rising by about 1.5%, while Tesla's shares surged by 4.3%, supported by selective investor interest.

This volatile performance comes as investors await a busy week of economic data, including the US jobs report and inflation (CPI) data, which are expected to provide clearer indicators about the strength of the US economy and the Federal Reserve's monetary policy direction in the coming period.