AI Stocks Sink Again, Wall Street's Record High Elusive

Wall Street's record high remains elusive as AI stocks continue to sink. The S&P 500 fell 0.7% on Tuesday, marking its third straight modest loss since reaching an all-time high on Thursday.

Micron Technology led the decline, dropping 7%, and was one of the heaviest weights on the S&P 500, along with chip companies Nvidia and Broadcom. These stocks have been volatile this summer due to concerns that their prices shot too high during the AI boom and that demand for data center components may fizzle out if AI proves less profitable than expected.

The recent declines in AI stocks are also attributed to high interest rates, which make investors more cautious about buying expensive stocks. The yield on the 10-year U.S. Treasury edged down to 4.70% from 4.72%, but remains well above its pre-war level of 3.97%. This has led to higher mortgage rates and slower borrowing for data centers.

Other companies, such as Home Depot, were also affected by the market trends. Despite reporting stronger profit and revenue than expected, Home Depot's stock slipped 0.1% due to concerns about the housing industry. Klarna fell 22.8% after cutting its financial forecasts for 2026, while Meta Platforms dropped 4.4% as a pivotal trial began in California federal court.