U.S. technology stocks fell sharply Thursday as surging oil prices revived inflation concerns while fresh questions about artificial-intelligence revenues and financing pressured semiconductor and infrastructure stocks.
The Nasdaq Composite closed down 1.25% at 27,193.34, while the S&P 500 lost 0.47% to 7,765.36. The Dow Jones Industrial Average bucked the decline, edging 0.10% higher to 51,231.64.
Semiconductors were at the center of the selloff. The Philadelphia Semiconductor Index fell about 3.4% as investors reassessed the economics behind enormous AI infrastructure investments.
Broadcom fell roughly 4.4%, Oracle dropped 5.5%, and Micron Technology declined 4.8%. Concerns intensified following reports about OpenAI’s annualized revenue and the enormous financing packages being assembled to support further AI infrastructure expansion.
Oil added another source of pressure.
West Texas Intermediate rose 3.6%, while Brent crude gained 4.1% to $104.28 a barrel, as disruptions around Middle Eastern shipping routes and hurricane-related reductions in U.S. production renewed concerns about energy inflation.
Higher energy prices threaten to keep inflation elevated and complicate the Federal Reserve’s interest-rate path.
The bond market offered some relief later in the session. The 10-year Treasury yield retreated toward 5.23% following strong demand at a 30-year Treasury auction. That helped support the broader market even as major technology shares remained under pressure.
The session exposed two risks that are increasingly converging for investors: inflation could keep borrowing costs elevated, while the AI investment boom may require substantially more capital before generating returns sufficient to justify current valuations.
Third-quarter earnings will provide the next major test. Investors will be looking beyond revenue growth toward cash generation, financing requirements and evidence that unprecedented AI capital spending is translating into sustainable profits.
