At the close: Nasdaq sags as Google falls more than 4%
The story of the day in US stock markets was a modestly positive open followed by steady selling until the European close and a flatline until the final minutes when it fell an additional 0.3 percentage points.
A main loser on the day was Google, which fell more than 4% and was a big reason the Nasdaq Composite was down 0.9% on the day. Zooming out, there’s clearly an element of profit taking at work after two sensational days to start the week.
Google fell after it was announced that AI wizard Demis Hassabis is stepping away from the day-to-day management of Google DeepMind to become Alphabet’s chief scientist and DeepMind chairman. DeepMind CTO Koray Kavukcuoglu will take over daily responsibility for frontier-model research and Gemini development. Longtime Google AI leader Jeff Dean, along with several other senior researchers, is leaving to create a new AI venture called Discovery Loop.
The fear is that these moves are coming after some sort of stumble in AI development at Google.
On the upside, shares of Nvidia had a strong day, climbing 3.8% in the fifth consecutive day of gains. The market is coming to terms with the idea that the hyperscaler AI capex spending spree will continue, and might even have a positive return on investment. The circular funding argument remains but I don’t worry too much. Nvidia is backstopping upwards of $250 billion in spending but its margins are 80% so its economic risk on that is only $50 billion, plus it could re-sell the chips.
Nasdaq daily chart:
Winners and losers on the S&P 500.
This article was written by Adam Button at investinglive.com.