US equities retreated on Thursday as artificial intelligence–linked stocks came under renewed selling pressure, weighing heavily on major indexes.
The decline came as investors reassessed lofty valuations in the AI sector while digesting concerning labor market data that hinted at broader economic strain.
The Dow Jones Industrial Average fell 287 points, or 0.6%, while the S&P 500 dropped 0.1%.
The Nasdaq Composite slid 1.39%, with the Nasdaq 100 down more than 2% since last Friday’s close, on track for its worst week since early April.
Heavyweights including Nvidia, Microsoft, Palantir Technologies, Broadcom, and Advanced Micro Devices (AMD) led the downturn, dragging broader benchmarks lower.
AI stocks lose momentum after recent gains
AI-related companies, which have driven much of this year’s market rally, faced heightened volatility as investors questioned whether their valuations could be sustained.
Qualcomm slipped 3% after reporting stronger-than-expected quarterly earnings but warning it may lose future business with Apple.
The potential loss overshadowed the company’s upbeat results and outlook.
Other AI leaders also saw sharp declines.
AMD, which had surged earlier in the week following strong third-quarter results, fell 5%, while Palantir and Oracle dropped 5% and 1.7%, respectively.
Shares of Nvidia and Meta Platforms—two members of the so-called “Magnificent Seven”—also moved lower, underscoring weakness across the broader technology complex.
AI stocks have traded unevenly since the start of November.
Earlier this week, the sector had staged a partial rebound as AMD, Broadcom, and Micron Technology lifted investor sentiment.
Oracle also recovered some ground from prior losses.
However, Thursday’s declines erased much of those gains, leaving all three major US indexes firmly in negative territory for the week.
Job cuts add to investor anxiety
Investor sentiment was further dampened by concerning labor market data.
According to Challenger, Gray & Christmas, October saw more than 153,000 job cuts, the highest for the month since 2003.
That figure represents nearly triple the number of layoffs reported in September and a 175% increase from the same month a year earlier.
The data suggests growing weakness in the labor market and raises concerns about the resilience of the US economy, particularly amid the ongoing government shutdown, which has now stretched beyond one month.
The shutdown, the longest in US history, has delayed key economic reports, further clouding the outlook for policymakers and investors alike.
The sudden rise in layoffs adds a note of caution for markets already jittery about slowing growth and high valuations in the tech sector.
Corporate movers: Datadog and Snap
Amid the broader market pullback, several individual stocks made sharp moves on earnings and deal announcements.
Datadog surged 25% after beating third-quarter profit and revenue expectations and raising its full-year outlook.
The cloud security company reported earnings of 55 cents per share on revenue of $886 million, surpassing analyst forecasts.
Brighthouse Financial jumped 26% after announcing it would be acquired by Aquarian Capital for $70 per share in a $4.1 billion cash deal expected to close next year.
Golden Entertainment soared 36% following news it would be purchased by Blake Sartini for $30 per share, a 41% premium to its prior close.
Conversely, Marriott Vacations Worldwide plunged 25% after cutting its full-year earnings guidance, while Duolingo tumbled 25% as its fourth-quarter bookings forecast fell short of expectations despite strong revenue growth.
Elsewhere, Snap climbed 10% after unveiling a $500 million stock buyback program and announcing a $400 million partnership with Perplexity AI to integrate its search tools into Snapchat.
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