Wall St. ends lower, Alphabet weighs after AI flub
STORY: U.S. stocks ended lower on Wednesday, paring most of the strong gains of the previous session, with tech-focused shares weighing heavily.
The Dow dropped six-tenths of a percent, the S&P shed 1.1% and the Nasdaq lost 1.7%.
The biggest drag on the S&P 500 and the Nasdaq was Google parent Alphabet, whose shares dropped nearly 8% after its new AI chatbot Bard delivered an incorrect answer in an online ad – and as a result, wiped away more $100 billion in Alphabet’s market cap.
While Google appeared eager to introduce its answer to the Microsoft-backed, explosively popular ChatGPT, Tyler Ellegard, portfolio manager at Gradient Investments, says investors overreacted to Bard’s flub.
“Obviously, it wasn’t ready. The rush was unwarranted. But I think the hiccup, you know, the stock being down – sure that would be warranted, but being down 8-9%, I don’t think that’s justified at this point [FLASH] and we would actually be buyers here, given this pullback that we’ve seen today.”
Adding to the cautious mood on Wall Street, Federal Reserve officials on Wednesday said more interest rate hikes are in the cards as the U.S. central bank moves ahead with efforts to control inflation.
Noteworthy movers included shares of CVS Health, which ended the session up 3.5% after its making $9.5 billion cash buyout offer for Oak Street Health, which rose 4.6%.
In after-hours trading, shares of Walt Disney were up almost 9% following the release of its quarterly results – in which the entertainment company said it will lay off 7,000 employees as part of a sweeping restructuring effort.