Wall Street’s main indexes closed lower on Wednesday, December 17, with the S&P 500 and the tech-heavy Nasdaq sinking to three-week lows amid ongoing concerns over the artificial intelligence (AI) sector. The S&P 500 lost 78.83 points, or 1.16%, to settle at 6,721.43, while the Nasdaq Composite dropped 418.14 points, or 1.81%, to reach 22,693.32. The Dow Jones Industrial Average fell 228.29 points, or 0.47%, ending at 47,885.97.
Shares of Oracle Corporation (ORCL.N) fell 5.4% after reports surfaced that its largest data center partner, Blue Owl Capital (OWL.N), would not support a proposed $10 billion deal for a new facility. This news contributed to broader anxieties within the tech sector regarding the sustainability of investments in AI.
In another notable development, Amazon.com (AMZN.O) experienced a decline of 0.6% following news that it is negotiating to invest approximately $10 billion in OpenAI, the creator of ChatGPT. Concerns about increasing debt within the technology sector to support AI development have hindered investor confidence.
Ross Mayfield, an investment strategist at Baird Private Wealth Management, noted, “There’s percolating anxiety about the AI trade. The primary driver is the level of capex and circular nature of some of the spending with OpenAI being at the center of that.” He added that the broader question heading into the New Year revolves around the return on investment for this substantial spending.
AI industry leader Nvidia (NVDA.O) saw its shares decline by 3.8%, while fellow chipmaker Broadcom (AVGO.O) fell 4.5%, contributing to a 3.9% drop in the broader semiconductor index. Alphabet Inc. (GOOGL.O) shares dropped 3.2% in response to a Reuters report indicating that its Google unit is launching a new initiative to challenge Nvidia’s software dominance, collaborating with Meta (META.O) in the effort.
In media news, the board of Warner Bros Discovery (WBD.O) rejected a hostile bid of $108.4 billion from Paramount Skydance (PSKY.O), opting instead to support a binding offer from Netflix (NFLX.O). Following the announcement, Netflix shares rose 0.2%, while Paramount and Warner Bros saw declines of 5.4% and 2.4%, respectively.
Energy stocks, however, witnessed gains amid rising crude prices, influenced by U.S. President Donald Trump’s directive to impose a blockade on sanctioned oil tankers entering and leaving Venezuela. Shares of ConocoPhillips (COP.N) and Occidental Petroleum (OXY.N) both increased by over 4%.
In a more positive light for investors, Federal Reserve Governor Christopher Waller indicated that there remains room for interest rate cuts in response to a softening labor market. This sentiment may alleviate some concerns as market participants await upcoming economic data, particularly Thursday’s consumer inflation report from the Commerce Department.
Market breadth was decidedly negative, with declining issues outnumbering advancers by a 1.5-to-1 ratio on the New York Stock Exchange. There were 135 new highs and 104 new lows recorded on the NYSE, while on the Nasdaq, 1,496 stocks advanced against 3,162 decliners, reflecting a 2.11-to-1 ratio of declining issues.
The S&P 500 noted 12 new 52-week highs but no new lows, while the Nasdaq Composite recorded 85 new highs compared to 175 new lows. Trading volume across U.S. exchanges reached 17.92 billion shares, surpassing the 16.97 billion average for the past 20 sessions.
As 2029 approaches, significant changes in the media landscape are also on the horizon, with YouTube announcing that it will stream the Oscar awards exclusively on its platform for free globally and on YouTube TV. The future trajectory for major technology and media companies remains uncertain, as they navigate complex market conditions and rapidly evolving consumer demands.
See also
Elon Musk’s xAI Launches Grok in El Salvador to Serve 1 Million Students by 2027
AI Cyber Threats Surge: 60% of Firms Targeted, Only 7% Deploy Defensive AI Tools
Moody’s Upgrades Marvell to Baa2 Amid AI Selloff; Key Market Catalysts Ahead
Meta Launches AI Glasses with Voice Amplification Feature for Noisy Environments
China’s AI Strategy: 10 Critical Insights for Managers on Integration, Scale, and Geopolitical Impact
