Nasdaq 100 index falls 1% as concerns over the sustainability of AI spending weigh on tech stocks

The S&P 500 Index was roughly flat on Friday. Although the market remains concerned about the sustainability of the artificial intelligence investment boom, signs that the Federal Reserve may keep rates unchanged this month have boosted investor sentiment. However, the Nasdaq 100 Index dropped by 1%. After a sharp decline in cloud computing service provider CoreWeave's share price, ongoing concerns about the AI industry ecosystem continued to weigh on tech stocks. Andrew Tyler, head of global market intelligence at JPMorgan, said, "Fed Chairman Waller’s speech at the IMF last night reinforced the market’s expectation that interest rates will remain unchanged in October. We are still looking for selective buying opportunities on dips." Concerns over how long the AI boom can last have led to continued volatility in related stocks. A significant portion of the pressure faced by Wall Street comes from global bond yields hovering near 20-year highs, pushing up financing costs and raising doubts about whether AI spending can remain resilient. Tech companies are particularly vulnerable to rising interest rates, as the valuations of many of these firms depend on projected profits expected to be realized only years into the future.