Wall Street Slides As Investors Fear AI Bubble And Nvidia Stumbles

The U.S. stocks fell sharply Tuesday as investors pulled back from big tech and questioned whether the AI boom can continue to justify sky-high valuations.

The S&P 500 dropped 1.2%, the Dow fell 1.2% and the Nasdaq slid 1.6% in early trading, even though all three indexes remain solidly positive for the year.

Nvidia again led the market lower, sinking more than 3% and deepening its monthly loss to nearly 11%, placing the AI chipmaker in correction territory.

Analysts say Nvidia’s outsized influence means its decline can drag the entire S&P 500, which surged over the past year on AI optimism.

Bank of America’s latest global fund manager survey shows 45% of investors now view an AI bubble as the top risk to the market.

Concerns are rising that companies are overspending on AI chips and data centers that may not deliver expected profits. Bitcoin and other speculative assets also slumped, while Treasury yields eased slightly.

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tippinsightsTIPP Staff