Wall Street experienced a significant decline as artificial intelligence (AI) stocks resumed their downward spiral, pulling major indexes lower. The S&P 500 fell sharply after fluctuating between early gains and steep losses, retreating further from its recent record high. The technology-heavy Nasdaq composite plunged amid heavy selling in companies tied to AI hardware and software.
Leading chipmakers that supply essential components for AI experienced notable drops. Micron Technology’s stock swung from a substantial intraday rise to a severe decline, continuing its volatile trading pattern after a meteoric rise earlier this year. Other prominent names in the sector, including Marvell Technology and Advanced Micro Devices, also erased early gains to close deep in the red. Nvidia, the most valuable company on Wall Street and a key player in AI chip production, saw its shares fall, weighing heavily on the overall market.
Meanwhile, optimism around new AI entrants continued as companies like OpenAI, the developer behind ChatGPT, filed confidential paperwork with U.S. regulators to pursue initial public offerings. SpaceX was also expected to proceed with a public listing soon, underscoring strong investor appetite despite current turbulence.
Contrasting the tech sell-off, the energy sector benefited from a drop in oil prices, which eased inflationary pressures on consumers and helped to moderate bond yields. Brent crude prices fell amid fluctuating prospects for a diplomatic deal reopening the Strait of Hormuz, a vital oil transit route. However, geopolitical tensions remained high after recent military incidents involving Iran, which has kept markets on edge.
Bond yields reflected these mixed signals, with the 10-year Treasury yield slightly retreating from recent highs but remaining elevated compared to before the conflict escalation. Investors are now keenly awaiting upcoming inflation reports, which could provide further clarity on economic trends amid the market’s current volatility and sector-specific shifts.