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Nasdaq Slumps Toward Worst Week Since April As AI Hype Backfires

Photo by Jorge Soto Farias

The Nasdaq Composite fell 1.6% Friday, putting it on track for its worst week since April, as investor anxiety over a potential AI bubble deepened. The S&P 500 slipped 1%, and the Dow Jones dropped 300 points amid a broader sell-off in tech.

Wall Street’s CBOE Volatility Index jumped 16%, while CNN’s Fear and Greed Index sank to “extreme fear” levels. Top analysts from Goldman Sachs and Morgan Stanley warned about inflated valuations, echoing fears that the market’s AI-fueled rally has gone too far.

Major players like Nvidia, Palantir, and Oracle all posted steep losses, with Oracle facing its worst week in seven years. OpenAI’s financial uncertainty also added to market jitters.

Analysts said the prolonged government shutdown and declining consumer sentiment are amplifying volatility. Still, some experts see this pullback as a potential buying opportunity for long-term investors.

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