AI Stocks Drag Wall Street Further from Record High

Wall Street continued its decline on Tuesday as AI stocks took another hit. The S&P 500 fell 0.7% for a third straight day since setting its all-time high on Thursday, 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 with a 7% drop, followed by chip companies Nvidia and Broadcom, which fell 2.3% and 3.2%, respectively.

The decline in AI stocks comes as investors grow increasingly cautious about their valuations. With interest rates remaining high, yields on U.S. Treasury bonds are still above their pre-war levels, making it more expensive for investors to buy into these stocks. Micron has more than tripled this year but remains a heavy weight on the S&P 500.

The decline in AI stocks is not just limited to the tech sector. The average long-term U.S. mortgage rate has risen to near its highest level in a year, hurting the housing industry. Homebuilders broke ground on fewer new houses last month than economists expected, and Home Depot's stock slipped 0.1% despite reporting stronger profit and revenue for the latest quarter.