Dow tumbles after hitting record high, while Broadcom latest to fuel AI bubble fears | Latest Tech News
Stocks on Wall Street plunged on Friday as Broadcom’s latest outcomes added to considerations about an AI-fueled bubble, dampening optimism stoked by the Federal Reserve’s less-hawkish-than-expected indicators on 2026 charge cuts.
In latest trading, the Dow Jones Industrial Average tumbled more than 200 factors, or 0.5%, to 48,462. The S&P 500 dropped 1.1%, and the Nasdaq misplaced 420 factors, or 1.8%.
The blue-chip index had risen practically 200 factors to 48,886, a new all-time intraday record.
Despite less-hawkish indicators on 2026 charge cuts, all three major indexes fell on Friday. AP
Broadcom slid more than 10% after the chipmaker warned of slimmer future margins on its AI system gross sales, despite projecting strong quarterly income.
This sharpened worries about the profitability of surging AI investments.
Other chip shares, such as Advanced Micro Devices misplaced 1% and a broader chips index fell 1.5% a day after Oracle unveiled a weak forecast.
Shares of the cloud company fell practically 5% after logging their largest daily drop since January in the earlier session.
“Given the fact that ‘Big Tech’ has been at the vanguard of the rally since October 2022, there’s a danger that it may become the catalyst for broad-based selling,” said David Morrison, senior market analyst at Trade Nation.
Despite the gloomy outlook, the S&P 500, the Dow and the Russell 2000 all closed at record highs on Thursday and have been on observe for weekly positive factors after the Fed trimmed borrowing prices and delivered a less hawkish outlook than buyers had feared.
Chipmaker Broadcom’s latest outcomes added to considerations about an AI-fueled bubble REUTERS
“There’s plenty of cash on the sidelines, the consumer is not as dire as many proclaimed, and the Fed is easing, not tightening. Plus, many sectors and stocks are well rested and ready to run,” said Robert Edwards, chief investment officer, Edwards Asset Management.
Meanwhile, policymakers who voted against the Fed’s rate of interest cut this week said they’re nervous that inflation stays too high to warrant decrease borrowing prices, notably given the dearth of latest official data about the tempo of price will increase.
Still, merchants are pricing in a whole of 50 foundation factors of charge cuts by the end of 2026 – more than the Fed signaled on Wednesday.
Among others, Nvidia slipped 1.9% after a report said the company is evaluating an increase in H200 chip manufacturing to meet strong demand from China.
Lululemon Athletica jumped 12% after the attire maker raised its annual revenue forecast and said that CEO Calvin McDonald was leaving the company.
In other single-stock strikes, US-listed shares of hashish corporations rose after a report said President Trump was wanting to cut restrictions on marijuana through a deliberate order. Canopy Growth added 23%, and Tilray Brands climbed 30%.
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