Tech stocks slide, dragging Wall Street lower as AI rally cools

Technology stocks extended their slide on Wednesday, pulling Wall Street lower and putting the S&P 500 on track for its first back-to-back decline in three weeks. By 9:35 a.m. Eastern time, the Dow Jones Industrial Average was down 314 points, or 0.6%, while the Nasdaq composite had fallen 0.8%.

The pressure came from the same corner of the market that had carried indexes to record highs: stocks tied to the artificial-intelligence boom. As those leaders weakened, investors who had crowded into the market’s fastest-growing theme began to question how much optimism was already embedded in share prices.

That reassessment mattered because the recent rally had not been confined to a narrow group of winners. AI stocks helped lift the broader market for months, and when those names lost momentum, the weakness spread quickly into the major averages. Even without a sudden economic shock, the market’s dependence on a handful of high-growth megacap names made the pullback feel broader than the initial selling suggested.

Some traders described the move in blunt terms, saying AI shares had “shot too high, too fast.” That concern reflected a deeper worry that technology valuations may have outrun the pace of profits, capital spending and real-world adoption. The selloff added to talk of a possible bubble in tech shares, especially after a long stretch in which the AI trade had dominated market leadership.

The pullback did not necessarily signal the end of the AI boom, but it did point to a more volatile phase ahead. Investors are likely to scrutinize earnings expectations, heavy investment plans and the durability of the AI narrative more closely as the market tries to separate genuine growth from momentum trading.

The weakness also reverberated beyond U.S. trading, with Asian shares and other risk assets feeling the impact of the tech selloff on Wall Street. That cross-border reaction underscored how concentrated the recent market advance had become, and how quickly sentiment can shift when the stocks doing the most lifting start to stumble.