On Tuesday, Wall Street saw further declines from its all-time high, driven primarily by the continued fall of AI stocks. The S&P 500 decreased by 0.7%, marking a third consecutive modest loss since its record high. Meanwhile, the Dow Jones Industrial Average dropped 116 points, or 0.2%, and the Nasdaq Composite fell by 1.3%.
Key contributors to the downturn were stocks that had previously surged due to the boom in artificial intelligence technology. Prices have been volatile amid concerns that they were overvalued and that demand for AI-related components may decline if the technology does not deliver expected profits. Micron Technology saw a 7% drop, significantly impacting the S&P 500. Other chip manufacturers like Nvidia and Broadcom also experienced declines of 2.3% and 3.2%, respectively. Despite recent fluctuations, these stocks remain among the year’s most successful, with Micron tripling in value.
High interest rates lead to increased scrutiny of stocks considered overpriced. Rates remained elevated globally, with the 10-year U.S. Treasury yield slightly down to 4.70% from 4.72% on Monday, yet still notably higher than its pre-war level of 3.97%. The 30-year Treasury yield also decreased but remains near its highest point since 2007.
Oil prices have exerted pressure on yields. Brent crude rose by 0.2% to $91.02 per barrel, fluctuating due to uncertainty over a deal allowing oil tankers to exit the Persian Gulf. Before the conflict began, Brent traded at $72.87 per barrel.
High yields have affected average U.S. mortgage rates, hindering the housing sector. Recent data indicated fewer home constructions than expected last month, impacting Home Depot, whose stock dipped 0.1% despite surpassing profit and revenue forecasts. The company’s CFO, Richard McPhail, noted ongoing customer interest in smaller projects.
Elsewhere, elevated yields could constrain borrowing by major tech firms for data centers, potentially slowing a key growth area for the U.S. economy. In other market moves, Klarna fell by 22.8%, despite strong quarterly results, after revising its 2026 financial forecasts, largely due to German market expectations. Meta Platforms declined 4.4% as a major trial opened in California federal court, addressing social media’s impact on children, with states seeking significant damages.
Overall, the S&P 500 declined 53.30 points to 7,691.76. The Dow Jones Industrial Average fell 116.38 points to 53,343.40, and the Nasdaq Composite decreased by 355.20 points to 26,289.71.
Globally, stock markets were mixed. Europe’s and Asia’s indexes varied, with South Korea’s Kospi falling 1.5%, a milder move following larger swings in previous days. Seoul’s market is heavily influenced by tech giants Samsung Electronics and SK Hynix, leading to sharp AI-driven fluctuations.
AP Business Writer Yuri Kageyama also contributed to this report.