AI Stocks Drag Wall Street Back from Record

Wall Street pulled back from its all-time high on Tuesday as AI stocks continued to sink. The S&P 500 fell 0.7% for a third straight modest loss, while the Dow Jones Industrial Average dipped 116 points, or 0.2%, and the Nasdaq composite sank 1.3%. Micron Technology led the way lower, dropping 7%, due in part to worries that prices shot too high during the AI boom and that demand for memory and processors may fizzle out if AI proves less profitable than promised.

Chip companies Nvidia and Broadcom also fell significantly, with Nvidia losing 2.3% and Broadcom sinking 3.2%. Despite recent swings, such stocks remain big winners, with Micron more than tripling this year. However, when interest rates are high, as they currently are, investors become less willing to pay high prices for expensive stocks.

Yields on U.S. Treasury bonds remained above their pre-war levels due to high oil prices and concerns about government debt loads. The yield on the 10-year U.S. Treasury inched down to 4.70% from 4.72%, but remains near its highest level since 2007. Brent crude added 0.2% to $91.02 per barrel, continuing to swing sharply due to uncertainty about a deal between the United States and Iran.