Global Tech and AI Stocks Drag Down Markets Amid Signs of Exhaustion

On Tuesday, equity indexes fell sharply as technology-focused shares led a broad sell-off. The S&P 500 closed down about 1.4 percent, while the Nasdaq Composite slipped 2.2 percent. The downturn was most dramatic in South Korea, where the KOSPI index dropped 10.5 percent, triggering a 20-minute trading halt by the exchange operator.

New York Times

The slide was anchored by waning enthusiasm for artificial-intelligence and semiconductor firms that have powered recent market rallies. Major U.S. tech names such as Alphabet continued to lose ground, extending losses from the previous session. SpaceX, Elon Musk’s aerospace and AI venture, saw its post-IPO surge reverse sharply, shedding roughly 20 percent of its value over the past week and erasing an estimated $600 billion in market capitalization; the stock finished the day near $156 per share.

New York Times

• S&P 500: –1.4 % close

New York Times

• Nasdaq Composite: –2.2 % close

New York Times

• South Korea KOSPI: –10.5 % intraday, trading halt invoked

New York Times

• SpaceX: –20 % weekly decline, $600 billion market-value loss

New York Times

Geoffrey Yu, a strategist at BNY in London, warned that the current price action could signal “A.I. exhaustion,” which may heighten fears about the global economy’s capacity to sustain a diversified growth narrative amid tighter funding and fiscal constraints. His assessment underscores investor concerns that the rapid rise of AI-related valuations may be reaching a limit.

New York Times

Analysts note that the sharp correction could temper optimism about AI-driven growth and prompt a reassessment of funding availability for tech innovators. A broader slowdown in AI-related investment may ripple through related sectors, influencing corporate earnings expectations and shaping monetary-policy considerations worldwide.

New York Times