AI Stocks Drag Down Wall Street Amid Higher Interest Rates

Wall Street's recent gains have slowed as AI stocks continue to sink. The S&P 500 fell 0.7% for a third straight modest loss since setting its all-time high on Thursday, while the Dow Jones Industrial Average dipped 116 points or 0.2%. The Nasdaq composite sank 1.3%.

Leading the way lower were AI technology stocks, which have been veering up and down this summer due to concerns that their prices shot too high in the AI frenzy. Companies like Micron Technology dropped 7%, Nvidia fell 2.3%, and Broadcom sank 3.2%. Despite recent swings, these stocks remain big winners, with Micron more than tripling this year.

High interest rates have contributed to the decline, as investors become less willing to pay high prices for stocks when yields are high. The yield on the 10-year U.S. Treasury edged down to 4.70% from 4.72% late Monday but remains well above its 3.97% level from just before the war with Iran began.