Stock Market Today: Tech Sell-Off Deepens as AI Bubble Fears Rattle Wall Street

U.S. stock markets dropped on Tuesday for the fourth day in a row, with both traditional blue-chip companies and rapidly expanding tech giants under intense pressure as a result of new concerns about an oncoming "AI bubble."

The S&P 500 and Dow Jones Industrial Average were about to enter a four-day losing skid, as the VIX volatility indicator kept rising, suggesting increased investor anxiety. Chipmakers Nvidia, AMD, Marvell, and Micron led the decline in tech-heavy companies, which caused the Nasdaq Composite to drop.

Global Markets Also in the Red

The rout extended beyond the U.S.

Major Asian indices, including Japan’s Nikkei and South Korea’s Kospi, tumbled more than 3%, dragged down by technology heavyweights like Samsung and SoftBank.

European markets fared no better, with regional benchmarks sliding at least 1% in early trading.

AI-Driven Valuation Concerns Rise

Soaring valuations and rising corporate debt linked to aggressive data center expansion have sparked fresh doubts among fund managers.

A recent survey revealed that 45% of global fund managers now view an AI-linked market bubble as the biggest “tail risk”, amid fears companies may be overspending on artificial intelligence projects.

Economic Data Ahead of Delayed Jobs Report

With the September U.S. jobs report delayed until Thursday, new figures from ADP indicate that private-sector job losses eased heading into November.

Separately, weekly jobless claims data from the Labor Department showed 232,000 initial filings in mid-October.

Home Depot Cuts Outlook

Retail giant Home Depot slashed its annual forecast, citing a prolonged slump in the home-improvement sector.

Its shares dropped sharply, adding pressure on the Dow. Rival Lowe’s will report earnings Wednesday, along with AI bellwether Nvidia, making for a closely watched session.

Market Snapshot

U.S. Treasury yields declined for a second straight day

Bitcoin briefly dipped below $90,000 before recovering

Major tech and retail stocks remain under heavy scrutiny