Wall Street closes lower as AI funding jitters drag tech stocks

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Wall Street's main indexes closed lower due to concerns over AI funding, with tech stocks like Oracle, Nvidia, and Broadcom experiencing significant losses. Oracle's largest data center partner, Blue Owl Capital, will not back a $10 billion deal for its next AI-related facility, fueling worries about debt to fund AI infrastructure. However, Micron Technology's strong earnings forecast provided a brief respite for the tech sector.

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Market impact analysis based on bearish sentiment with 77% confidence.

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STORY: Wall Street's main indexes closed lower on Wednesday, with the Dow dropping nearly half a percent, the S&P 500 shedding more than 1% and the Nasdaq losing 1.8%.Shares of Oracle dropped nearly 5.5% after a report said the company's largest data center partner, Blue Owl Capital, will not back a $10 billion deal for its next AI-related facility.Adam Coons is chief investment officer at Winthrop Capital Management."In particular today, the story is around Oracle, the continued buildout, and then the fact that Blue Owl, who's been prevalent with some other deals with AI stories, actually did not participate in Oracle's equity offering surrounding their buildout of their data center up in Michigan. So that got markets just a little bit worried about, you know, kind of the growing angst around growing debt to fund all of this AI infrastructure build.”Worries about the technology sector taking on more debt to develop AI have discouraged risk-taking lately.Shares of AI bellwether Nvidia fell nearly 4% on Wednesday, and fellow chipmaker Broadcom dropped 4.5%.Shares of Amazon also closed lower after reports said the company is in talks to invest about $10 billion in ChatGPT maker OpenAI.On the flip side, shares of Micron Technology rose as much as 14% in extended trading, before paring some of those gains, after the company forecast second-quarter profit well above Wall Street estimates, buoyed by soaring prices for memory chips and booming demand from AI data centers.

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