AI Stocks Lead Wall Street Back Down from Record

Wall Street's recent rally has stalled as AI stocks continue to decline. The S&P 500 fell 0.5 percent on Tuesday, marking its third straight modest loss since setting an all-time high last Thursday.

The Dow Jones Industrial Average was down 56 points, or 0.1 percent, while the Nasdaq composite dropped 1.1 percent. AI-related stocks such as Micron Technology, Nvidia, and Broadcom led the decline, with Micron plummeting 7 percent.

These stocks have been volatile this summer due to concerns that their prices skyrocketed too high during the AI boom and may not be sustainable. The strong demand for memory, processors, and other data center components may fizzle out if AI proves less profitable than expected.

The high interest rates and yields in bond markets worldwide are also putting pressure on investors to reevaluate expensive stocks. The 10-year U.S. Treasury yield edged down to 4.71 percent but remains above its pre-Iran war level of 3.97 percent.