The economic outlook worsened as the Federal Reserve's preferred inflation measure remained high, and consumer spending data came in lower than expected. The ongoing tariff threats from President Trump added to the uncertainty, impacting investor confidence. The tech sector, which had driven market gains due to AI optimism, is now facing skepticism as profits remain elusive. This has led to a broader market sell-off, affecting not only tech stocks but also energy companies like Vistra Corp. and GE Vernova Inc., which have been reliant on data center spending.
Key takeaways:
- US stocks fell sharply due to concerns over tariffs potentially increasing inflation and weakening consumer sentiment.
- Tech stocks, including Nvidia and other major companies, experienced significant selling as investors moved away from risk assets.
- Economic worries intensified with the Federal Reserve's inflation measure remaining high and spending data coming in lower than expected.
- There are concerns about overbuilding in AI infrastructure, with potential risks to companies involved in energy production and data centers.