Nasdaq plunges as consumer sentiment nears historic lows, panic over AI spending mounts

Stocks tumbled on Friday as consumer sentiment plunged near all-time lows and investors panicked over AI spending – hammering tech stocks in their worst week since April.The tech-heavy Nasdaq dropped 0.2% Friday, closing the week down 3% – its worst drop since the April launch of President Trump’s “Liberation Day” tariffs sparked a massive sell-off. Concerns about the government shutdown – which entered its 38th day on Friday, setting a new record — sent monthly consumer sentiment to its lowest level in over three years.The reading of 50.3 marked a drop of 6.2% on the month and about 30% from this time last year – near the worst-ever level for consumer sentiment, according to data released by the University of Michigan on Friday.Along with worries about the shutdown, broader economic concerns regarding inflation remained top of mind for many Americans.Prices on everything from a cup of coffee and kids’ toys to living room furniture and Amazon deals have soared.“Consumers perceive pressure on their personal finances from multiple directions,” Joanne Hsu, director of the University of Michigan survey, told Bloomberg.

“Consumers also anticipate that labor markets will continue to weaken in the future and expect to be personally affected.”The only time that consumer confidence in their finances and the economy has been worse came in June 2022, during a historic rise in inflation.Sign up to receive On The Money by Charlie Gasparino in your inbox every Thursday.

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Never miss a story.Meanwhile, investors have been panicking over massive AI spending, questioning whether stocks have been overvalued – reminiscent of the dot-com bubble in the late 1990s.The worst-performing stock in the S&P 500 this week was Super Micro Computer, which sells equipment for AI data centers.

The stock fell about 25% t...