AI-related shares pull U.S. indices lower as global markets slide
AI stocks fell on Tuesday, contributing to a 0.3% drop in the S&P 500, while rising oil prices and geopolitical tensions added pressure to global markets.
U.S. equity markets declined on Tuesday as shares tied to artificial-intelligence technology fell, dragging the S&P 500 down 0.3% despite most components posting gains. The Nasdaq Composite slipped 0.6% and the Dow Jones Industrial Average lost 153 points, or 0.3%, by early afternoon Eastern time.
The sell-off began in Asian markets, where Samsung Electronics dropped 6.9% after previewing a second-quarter outlook that projected operating profit growth of roughly 1,800% year over year. Analysts noted the results were strong but insufficient to sustain the stock’s more-than-double rise earlier in the year.
In the United States, semiconductor makers faced renewed weakness. Micron Technology fell 5% and was the largest weight on the S&P 500, while Intel declined 9.1%. Nvidia, the market’s biggest AI-linked stock, rose 1.1% after an earlier dip, providing modest relief to broader indices.
Other notable moves included SpaceX’s parent company, which owns xAI, slipping 5.2% after its addition to the Nasdaq-100. Vertex Pharmaceuticals fell 1% following its agreement to acquire Crinetics Pharmaceuticals for $85 per share in cash, a deal that sent Crinetics shares up nearly 99%. Rivian Automotive dropped 15.1% after announcing a 75-million-share offering that would dilute existing shareholders.
Commodity markets added to the pressure as Brent crude rose 2.9% to $74.11 after the British military reported that three tankers were hit by projectiles in the Strait of Hormuz, reviving concerns about the conflict in Iran and the reopening of the shipping lane. Higher oil prices lifted inflation expectations, prompting Treasury yields to climb; the 10-year U.S. Treasury yield rose to 4.52% from 4.48%.
Internationally, South Korea’s Kospi fell 4.9%, largely reflecting Samsung’s weight in the index, while Japan’s Nikkei 225 slipped 2.1% and Germany’s DAX declined 1.4%.
"Analysts called the numbers surprisingly good, but they still weren’t enough for investors," the report noted.
The combined impact of AI-related stock weakness, rising energy costs and geopolitical uncertainty contributed to the broader market decline.