{"id":995,"date":"2025-11-11T20:35:10","date_gmt":"2025-11-11T20:35:10","guid":{"rendered":"https:\/\/journalbiz.news\/?p=995"},"modified":"2025-11-11T20:35:10","modified_gmt":"2025-11-11T20:35:10","slug":"market-reversal-wall-street-rethinks-ai-as-valuation-fears-ripple-through-tech","status":"publish","type":"post","link":"https:\/\/uptempo.news\/ro\/market-reversal-wall-street-rethinks-ai-as-valuation-fears-ripple-through-tech\/","title":{"rendered":"Market Reversal: Wall Street Rethinks AI as Valuation Fears Ripple Through Tech"},"content":{"rendered":"

NEW YORK \u2014<\/strong> Wall Street\u2019s long-running infatuation with artificial intelligence hit another pause on Tuesday as investors pulled back from big technology names, sending the S&P 500 and Nasdaq into the red amid renewed doubts about whether AI\u2019s profits can justify its price.<\/p>\n\n\n\n

The S&P 500 slipped 0.2% and the Nasdaq Composite dropped 0.7%, reversing Monday\u2019s rally that had briefly restored optimism across technology stocks. The Dow Jones Industrial Average rose 0.6%, supported by energy and healthcare gains, but the day\u2019s market narrative centered on one question: has AI grown too big, too fast?<\/p>\n\n\n\n

The retreat began with a surprise move by Japan\u2019s SoftBank Group, which disclosed the sale of its entire Nvidia stake for $5.83 billion. The exit, coming from one of AI\u2019s most vocal early champions, sparked unease among investors who have treated Nvidia as the standard-bearer of the artificial intelligence revolution. Nvidia shares fell 3.7% by midday.<\/p>\n\n\n\n

Adding to the unease, cloud-computing startup CoreWeave \u2014 backed by Nvidia \u2014 cut its annual revenue forecast, citing data-center disruptions. Its shares tumbled more than 12%, dragging down related chipmakers and infrastructure firms. \u201cThere\u2019s a little bit of weakness across AI headlines \u2014 nothing catastrophic, just cracks in the armor,\u201d said Ross Mayfield, an investment strategist at Baird. \u201cThese are still great companies, but valuation discipline has to return.\u201d<\/p>\n\n\n\n

Technology stocks were the biggest drag on the S&P 500, slipping 1.2%. The Philadelphia Semiconductor Index fell 2%, while health and energy stocks gained ground. Shares of Eli Lilly, Merck, and Amgen climbed between 2% and 3.5%, buoying the healthcare sector by 1.6%.<\/p>\n\n\n\n

Investors also parsed weak labor data, with private employers reportedly shedding an average of 11,000 jobs per week through late October, according to payroll estimates. Combined with the effects of the now six-week U.S. government shutdown, the data added to the uncertainty clouding near-term growth.<\/p>\n\n\n\n

The shutdown itself appeared to be nearing a resolution. The Senate approved a stopgap spending deal on Monday night, and the House was expected to vote Wednesday to reopen the government. Betting markets fully priced in a reopening this week. President Donald Trump has pledged to sign the measure, saying, \u201cWe\u2019re opening up our country. Should have never been closed.\u201d<\/p>\n\n\n\n

Still, with air travel disrupted, food aid delayed, and government contractors on hold, the impact of the fiscal paralysis has already seeped into consumer sentiment and spending expectations. \u201cThis is not just a political issue anymore \u2014 it\u2019s an economic one,\u201d said Morgan Adams, chief strategist at Granite Capital. \u201cMarkets are looking for stability, and that\u2019s hard to price in when government operations are off balance.\u201d<\/p>\n\n\n\n

Beyond politics, investors are increasingly grappling with the shape of AI\u2019s financial reality. The sector\u2019s rapid rise has been fueled by enthusiasm for transformative potential \u2014 from generative algorithms to industrial automation \u2014 but analysts have begun to question whether earnings can keep pace with trillion-dollar valuations.<\/p>\n\n\n\n

Last week\u2019s market correction saw major AI players lose more than $250 billion in combined market capitalization. That dip came even as corporate investment continues to pour into the sector: Paramount Skydance rose nearly 10% after announcing a $1.5 billion expansion into streaming and studio production, signaling that traditional media firms still see AI-enhanced operations as a path forward.<\/p>\n\n\n\n

At the same time, the energy sector quietly strengthened. Occidental Petroleum beat third-quarter profit expectations, adding 2.8% to its share price and lifting the S&P 500 energy index by 1.6%. Investors rotated modestly into oil and gas equities as a hedge against tech volatility.<\/p>\n\n\n\n

For all the turbulence, market breadth remained positive. On the New York Stock Exchange, advancing issues outnumbered decliners by a 1.6-to-1 ratio, while the Nasdaq maintained a narrow margin of gainers. The S&P 500 recorded 22 new 52-week highs versus two new lows.<\/p>\n\n\n\n

Yet sentiment remains fragile. \u201cAI is the growth story of the decade,\u201d Mayfield added, \u201cbut that doesn\u2019t mean it\u2019s immune to gravity. The market needs time to digest how profits will actually materialize.\u201d<\/p>\n\n\n\n

As bond markets remained closed for the Veterans Day holiday, trading volumes were light. Analysts expect volatility to persist through the week as investors digest both the potential government reopening and fresh inflation data.<\/p>\n\n\n\n

In the meantime, Wall Street is learning a familiar lesson in a new technological age \u2014 that even the most revolutionary ideas must eventually meet the discipline of fundamentals.<\/p>","protected":false},"excerpt":{"rendered":"

NEW YORK \u2014 Wall Street\u2019s long-running infatuation with artificial intelligence hit another pause on Tuesday as investors pulled back from big technology names, sending the S&P 500 and Nasdaq into the red amid renewed doubts about whether AI\u2019s profits can justify its price. The S&P 500 slipped 0.2% and the Nasdaq Composite dropped 0.7%, reversing […]<\/p>\n","protected":false},"author":1,"featured_media":996,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","footnotes":""},"categories":[5,33,34,35],"tags":[],"class_list":["post-995","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-investing","category-markets","category-stocks"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/posts\/995","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/comments?post=995"}],"version-history":[{"count":0,"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/posts\/995\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/media\/996"}],"wp:attachment":[{"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/media?parent=995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/categories?post=995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/uptempo.news\/ro\/wp-json\/wp\/v2\/tags?post=995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}