Wall Street wavers as AI rally stalls: Nasdaq slides after chip stocks retreat
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10 days · 6 summary articles
Wall Street’s AI-driven rally ran out of steam on Tuesday as investors locked in profits and reassessed valuations, sending the Nasdaq Composite down 1.16% to 25,818 points and the tech-heavy Nasdaq-100 down 1.77% to 29,173 points . The Dow Jones Industrial Average slipped 0.25% to 52,924, while the S&P 500 fell 0.45% to 7,503. Semiconductor stocks led the retreat, with Nvidia down 1.51%, AMD off 6.80%, Micron down 6.65% and Marvell Technology falling 5.89% after Samsung Electronics reported record earnings that failed to quell concerns over unsustainable growth .
The pullback follows a historic first half in which chipmakers powered by AI demand posted their strongest quarter on record, but investors are now demanding clearer evidence that earnings will justify stretched valuations . Ten-year Treasury yields rose more than four basis points to 4.523%, while the 30-year bond climbed to 5.037%, breaching 5% for the first time since May as markets priced a hawkish tilt from the Federal Reserve .
Microsoft is quietly shifting some AI workloads from OpenAI and Anthropic to its own in-house MAI models where cost or data-residency requirements favor internal deployment, Bloomberg reports. The move is incremental and does not signal a wholesale break; OpenAI and Anthropic continue to handle most Copilot traffic, but the shift underscores Microsoft’s push to reduce third-party dependency and control data flows .
SpaceX, meanwhile, joined the Nasdaq-100 on Tuesday, less than a month after its June 12 public debut, after the index’s governing board waived its usual three-month listing requirement. The decision clears the way for other recent IPOs, including AI giants OpenAI and Anthropic, to be considered for inclusion in the benchmark, which underpins more than 200 exchange-traded funds, pension funds and other investment products . SpaceX shares slipped on their first day in the index, with analysts at Handelsblatt citing elevated expectations and warning of potential volatility as the stock adjusts to its new benchmark status .
Across the Atlantic, the European Union adopted an action plan to mitigate AI-related cyber risks, calling for safer deployment of frontier models and stronger defenses against AI-powered attacks. The plan emphasizes responsible use, security-by-design and Europe’s need to keep pace with rapid advances in AI capabilities . The European Central Bank separately told the eurozone’s largest banks to submit plans by October 31 detailing how they will defend against AI-driven cyber threats that can exploit vulnerabilities in minutes .
In corporate news, BlackRock named Spain its preferred market for global equity exposure in the second half of 2026, citing 8% post-pandemic growth, a current-account surplus of 2.2% and controlled inflation below 3%. The asset manager, which already has €104 billion invested in Spain, highlighted banks, utilities and infrastructure as key beneficiaries of AI-related megatrends .
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