Tuesday, September 29 · covering the prior market day
Tech sold off hard as Wall Street questions whether AI's massive costs will ever pay off.
S&P 500-0.74%
Nasdaq 100-1.07%
Dow-0.67%
Small caps-0.69%
Bitcoin+0.63%
Story 01
The AI spending problem: where's the money coming from?
A major consulting firm estimates that two-thirds of the The total money a company brings in — its top line. needed to justify Big Tech's massive AI infrastructure buildout doesn't exist yet. This is a core question markets are wrestling with: companies spent hundreds of billions on chips and servers, but haven't figured out how to make that money back. It's why tech stocks are under pressure.
In the market
The A tech-heavy U.S. stock index. 100 dropped 1.07% and the tech sector fell 0.89%, the second-worst performer of the day after financials.
JPMorgan's tech flip: from cautious to all-in overnight
A JPMorgan team that warned investors to be careful on stocks a month ago just reversed course and went aggressive on tech. This kind of sudden shift from a major bank often signals either that they see a real opportunity—or that The tendency of a price trend to keep going. is pushing them to chase a A sustained rise in prices. they missed.
In the market
Tech still fell 0.89% despite the bullish call, suggesting the market hasn't bought the reversal yet.
Morgan Stanley's Wilson: a A drop of about 10% from a recent high. might be healthy
Morgan Stanley strategist Mike Wilson is suggesting that the An index of 500 big U.S. companies — the market's main benchmark. pulling back could actually be good for the market long-term. After a strong 2024, a dip could reset An estimate of what a company or asset is worth. and clear out weak positions. Not a prediction of doom—more like saying markets need to breathe.
In the market
The An index of 500 big U.S. companies — the market's main benchmark. dropped 0.74% yesterday, which could be the kind of modest A drop of about 10% from a recent high. Wilson is referencing.