Key takeaways
- Wall Street saw a steep selloff as investors pulled back from technology and AI-linked stocks.
- The Nasdaq fell more than 5%, marking its worst day in 18 months and entering correction territory.
- Concerns over AI spending and possible tougher scrutiny helped fuel the shift in sentiment.
- The downturn did not stay in the U.S., with Asian markets also falling after the Wall Street rout.
Wall Street ended in turmoil as investors rushed out of technology shares, driving a broad market selloff that erased about $2.5 trillion in value. The Nasdaq led the decline, falling more than 5% in its worst session in 18 months.
The drop came as traders reassessed some of the most popular AI-related bets. Reports suggested that concerns about heavy spending on artificial intelligence, along with the prospect of tougher scrutiny after midterm election results, helped weaken confidence in the sector.
A sharp reversal in tech stocks
The biggest damage came from technology shares, which had been among the market’s strongest performers. As investors moved to reduce risk, the selling gathered pace and pulled major indexes lower.
The Nasdaq’s decline stood out because of both its size and speed. A fall of more than 5% is enough to send a market into correction territory, which signals a drop of at least 10% from recent highs and often changes investor behavior quickly.
- Nasdaq: Fell more than 5% in its worst session in 18 months.
- Market value: About $2.5 trillion was wiped out in the broader selloff.
- Sentiment: Investors rethought exposure to AI-linked trades.
