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Market slide persists on AI hype concern
Tech stocks slide again as investors question the durability of the rally and await Nvidia earnings.
Tech shares fall again while investors reassess the strength of the rally and earnings outlook.
US sell-off accelerates as tech stocks slide
US stocks extended a slide on Wednesday as a second straight day of losses pulled the tech heavy Nasdaq 1.7% lower and the S&P 500 1% down. Nvidia dropped 3.6%, Palantir Technologies fell 7.7%, and Arm Holdings slid 4.7% as traders weighed how durable the rally can be amid stretched valuations. Tuesday’s move also showed renewed weakness, with the Nasdaq down 1.4% and the S&P 500 0.7% lower, signaling a weak week for major benchmarks. Analysts said investors remain cautious as results season unfolds and focus turns to earnings signals that could set the tone for tech shares.
Key Takeaways
"AI is going to be revolutionary."
Neil Birrell on AI hype and market impact.
"In any form of revolution, there are periods of excitement and periods of worry."
Birrell on market mood during the tech rally.
"Some near-term tech volatility is not surprising."
Hoffmann-Burchardi on market volatility.
"We remain confident in the broader AI sector’s long-term growth."
Hoffmann-Burchardi on long term outlook.
The pullback highlights the tension between hype and reality in the AI era. When one sector carries most gains, a setback in that area can trigger broader nerves. A MIT study showing many firms have yet to see returns from generative AI investments adds a sober note to the optimism, while some investors look for a deeper pullback before a potential rebound. Yet others argue the long term case for AI remains intact if earnings stay resilient and monetisation opportunities widen.
Highlights
- AI will be revolutionary
- In any form of revolution there are periods of excitement and periods of worry
- Some near term tech volatility is not surprising
- We remain confident in the broader AI sector long term growth
Political and market risk around AI hype
The market moves are tied to policy signals and investor sentiment on AI. A sober earnings backdrop and political talk about tariffs could amplify volatility and affect funding and public perception of tech bets.
Markets will move on earnings signals rather than headlines.
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