The tech-heavy Nasdaq tumbled to over a week low on Wednesday, as Alphabet’s projections for rising AI costs dented most megacap and chip stocks ahead of a crucial Federal Reserve policy decision expected later in the day.

The Google-parent slumped 6.1%, pushing the S&P 500 communication services sector 3.0% lower, after reporting holiday-season advertising sales below expectations and projecting higher AI-related spending.

Microsoft also lost 1.3% after it forecast higher costs to develop new artificial-intelligence features, which overshadowed its upbeat quarterly results.

Even though the tech pioneers talked up how customers are lapping up their generative AI-powered products, mounting development costs for the cutting-edge features irked investors who had hoped for a big boost to sales from the new technology.

The tech results and forecasts, coupled with Tesla’s growth warning last week, have prompted renewed focus on risks from the outsized weighting of the megacap names in the S&P 500 that has hit record highs in recent weeks.

Apple, Meta Platforms and Amazon.com , set to report earnings on Thursday, fell over 1% each.Advanced Micro Devices dropped 3.3%, as the chipmaker’s first-quarter revenue forecast and a boosted projection for AI processors failed to meet expectations.Other chip stocks including Nvidia, Broadcom and Marvell Technology dropped over 1% each.

New York Community Bancorp slumped 35.8% after swinging to surprise loss and slashing its dividend, driving the KBW Regional Banking index down 3.7%.

Supporting the blue-chip Dow, Boeing rose 5.8% following narrower-than-expected quarterly loss, though the plane maker delayed annual financial and delivery forecasts.

The focus was now on the Fed’s first monetary policy decision this year, at 2 p.m. ET. The Fed is widely expected to hold rates steady. But any clues from it on the first cut could help determine the fate of the heavily weighted tech and tech-adjacent stocks.

“The critical point is with economic data being stronger, there’s less of an excuse for the Fed to be pushing towards deeper accommodation and more aggressive rate cuts,” said Joel Kruger, market strategist at LMAX Group.

The latest ADP National Employment report showed private payrolls rose by 107,000 in January, far less than the estimated 145,000 increment, a day after a JOLTS report reflected an unexpected rise in December job openings.

At 11:36 a.m. ET, the Dow Jones Industrial Average was up 23.49 points, or 0.06%, at 38,490.80, the S&P 500 was down 41.34 points, or 0.84%, at 4,883.63, and the Nasdaq Composite was down 225.96 points, or 1.46%, at 15,283.94.15,283.94

Among others, Tesla shed 0.8% after a Delaware judge tossed out Elon Musk’s record-breaking $56 billion Tesla pay package.

Thermo Fisher Scientific dropped 3.4% after the medical equipment maker forecast annual profit below estimates.

Declining issues outnumbered advancers for a 1.24-to-1 ratio on the NYSE and a 1.39-to-1 ratio on the Nasdaq.

The S&P recorded 59 new 52-week highs and one new low, while the Nasdaq recorded 58 new highs and 74 new lows.

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