Market Rally Stalls as Meta’s AI Spending Sparks Sell-Off
According to Bloomberg, the recent market rally came to a sudden halt as investors reacted nervously to Meta’s soaring AI-related expenditures. The S&P 500 slipped 1%, with the “Magnificent Seven” — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla — facing a sharp sell-off.
$78 Billion Spent on AI Infrastructure Raises Doubts
Alphabet, Meta, and Microsoft collectively invested a record $78 billion in AI infrastructure this year — an 89% increase year-over-year. While this underscores the tech sector’s commitment to artificial intelligence, it has also raised concerns about overvaluation and uncertain returns.
Investors now question whether the massive capital inflows into AI will translate into sustainable profit growth or lead to another cycle of speculative excess.
Fed’s Tone and China Truce Fail to Inspire Confidence
Meanwhile, a tentative U.S.–China trade truce failed to energize global markets. Traders remain focused on signals from the Federal Reserve, where Chair Jerome Powell indicated no urgency to cut interest rates in December.
Analysts Expect Short-Term Correction but Strong Earnings
Despite expectations of a short-term correction, corporate earnings across the S&P 500 remain solid as U.S. firms continue their reporting season. Historically, November ranks among the strongest months for equities, but analysts warn that much of the year’s growth may already be priced in.
