Nasdaq stalls amid SpaceX IPO and AI market concerns

The Nasdaq index, which reached a record above 27,000 in early June, has moved sideways since SpaceX debuted its shares on the public market. Shares of the so-called Magnificent Seven—companies viewed as central to the U.S. artificial-intelligence push—peaked in late May and early June and have declined since.

SpaceX’s stock rose to more than $200 after the offering but has slipped more than 25% thereafter. Analysts had suggested that a sustained rise could signal a new phase for AI, while a decline might indicate a correction in the sector.

On the day of the IPO, the U.S. government announced temporary export controls on Anthropic’s Mythos and Fable models, a move later reversed that nevertheless raised concerns among foreign users of American AI services. The episode prompted some overseas firms to explore Chinese alternatives, citing both regulatory risk and rising costs as U.S. providers shifted from subscription fees to per-token pricing.

If cost-sensitive customers continue to adopt cheaper, marginally less capable models, the revenue outlook for major U.S. AI companies could be challenged, potentially affecting the high valuations that have driven recent stock gains. Investors appear to be taking profits amid the uncertainty.

Market participants are now watching whether the decline will stay confined to technology stocks or spread to broader equities, as fund managers may need to rebalance portfolios. With the U.S. earnings season beginning, corporate performance will be closely scrutinized for signs of resilience or further weakness.