Nasdaq Down Over 400 Points As AI Stocks Tumble: Investor Sentiment Declines, Greed Index Moves To 'Fear' Zone
The CNN Money Fear and Greed index showed a decline in the overall market sentiment, while the index moved to the “Fear” zone on Wednesday.
U.S. stocks settled lower on Wednesday, with the Nasdaq Composite falling more than 400 points during the session as investors dumped tech and AI-linked stocks.
Nvidia Corp. (NASDAQ:NVDA) dropped around 4%, posting its steepest decline in two months and sinking to its lowest level since mid-September. Oracle Corp. (NYSE:ORCL) slid 5.4%, extending its drawdown from October’s all-time highs to nearly 50%.
General Mills Inc. (NYSE:GIS) posted better-than-expected second-quarter earnings and reaffirmed its fiscal 2026 outlook. Jabil Inc. (NYSE:JBL) posted upbeat earnings for its first quarter.
On the economic data front, the volume of mortgage applications fell 3.8% in the week ended Dec. 12, following a 4.8% growth in the previous period.
Most sectors on the S&P 500 closed on a negative note, with information technology, communication services and industrials stocks recording the biggest losses on Wednesday. However, consumer staples and energy stocks bucked the overall market trend, closing the session higher.
The Dow Jones closed lower by around 228 points to 47,885.97 on Wednesday. The S&P 500 fell 1.16% to 6,721.43, while the Nasdaq Composite dipped 1.81% to 22,693.32 during Wednesday's session.
Investors are awaiting earnings results from Accenture Plc (NYSE:ACN), FedEx Corp. (NYSE:FDX) and Nike Inc. (NYSE:NKE) today.
What is CNN Business Fear & Greed Index?
At a current reading of 39.1, the index moved to the “Fear” zone on Wednesday, versus a prior reading of 45.5.
The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.
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