S&P 500, Nasdaq Drop on AI Doubts — SkimNews
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- S&P 500 closed sharply lower amid revived doubts about AI's commercial viability, extending a tech-led selloff that hit chipmakers and major tech platforms
- Nasdaq posted its steepest decline in months as investor confidence in AI-driven growth wavered, pulling down valuations across AI-exposed sectors
- Chip stocks including Nvidia and AMD declined significantly, marking their worst weekly performance since July on concerns over AI spending returns
- Meta shares fell alongside chipmakers as scrutiny intensified over the profitability and scalability of large-scale AI investments
- Investors rotated out of AI-heavy tech into defensive sectors like healthcare and bonds, reflecting a shift in risk appetite amid uncertain AI monetization
Why it matters: Tech and chip stocks lose ground as AI's promised returns face reality checks, directly impacting investor portfolios and capital allocation. The selloff reveals a material pivot: markets are no longer assuming AI will automatically drive near-term earnings, making further gains dependent on proof, not hype.
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