Wall Street slips on losses in financials, tech

NEW YORK: Wall Street’s main indexes fell on Thursday, with financials sliding amid a broad selloff in private equity companies and weakness in some technology stocks, though some earnings-driven gains in industrials helped limit losses.

Private equity companies slid after Blue Owl Capital’s decision to sell USD1.4 billion in assets and freeze redemptions at one of its funds to manage debt and return capital.

Apollo Global Management, Ares, KKR & Co and Carlyle Group fell sharply, while Blue Owl was down 9 percent.

Shares of Walmart were also down marginally after new CEO, John Furner, kicked off his tenure with a conservative fiscal 2027 forecast as well as a USD30 billion buyback plan.

However, more than 12 percent gains in Deere & Co after the farm-machinery maker raised its annual profit forecast and beat first-quarter results estimates, helped curb losses.

Megacap and growth stocks were mixed, though chip stocks were under pressure with the Philadelphia SE Semiconductor Index down 0.7 percent. Broader AI-linked and megacap technology stocks are facing turbulence amid concerns over high valuations and limited evidence that significant investments in AI are driving revenue and profit growth.

Sectors ranging from software to trucking have also been hit by concerns that rapidly improving AI tools could disrupt their business models.

“All of a sudden (markets) discovered that AI is going to have a big impact on the way businesses are being done … it’s just an over-reaction,” said Max Wasserman, founder and senior portfolio manager at Miramar Capital.

At 11:41 a.m. ET, the Dow Jones Industrial Average fell 236.36 points, or 0.48 percent, to 49,426.30, the S&P 500 lost 19.45 points, or 0.28 percent, to 6,861.86 and the Nasdaq Composite lost 41.72 points, or 0.18 percent, to 22,711.92.

In earnings-related moves, ad giant Omnicom jumped 13.1 percent after the company beat analysts’ estimates for fourth-quarter revenue, while Carvana dropped 8.2 percent after the online used-car retailer missed fourth-quarter profit estimates.