Nasdaq Falls 2% as Nvidia and Intel Slide on AI Spending Doubts
SPY•U.S. technology stocks suffered a sharp sell-off Tuesday, pushing the Nasdaq down 2% as semiconductor leaders Nvidia and Intel slid on doubts over AI spending justification. Newly public SpaceX also traded below its $150 opening price before modestly recovering, while analysts debate whether the pullback marks a pause or a broader retreat.
1. Market Sell-Off Sparks Broad Decline
On Tuesday, technology stocks led a broad market downturn as the Nasdaq index fell roughly 2%, driven by heavy selling in semiconductor names. Nvidia and Intel slid significantly as investors questioned whether ongoing corporate adoption of AI hardware can justify current valuation levels.
2. SpaceX Volatility
Newly public SpaceX saw its shares dip below its $150 flotation price, hitting intraday lows near $145 before recovering to end around $157. This volatility underscored investor caution toward recently listed growth companies when broader tech sentiment weakens.
3. Analyst Reactions
Market strategists are split on whether the correction represents a healthy pause after a 90-day rally or the start of a more protracted downtrend. Proponents of the pause theory cite normal profit-taking, while skeptics warn that cooling IT budgets and sticky inflation could pressure earnings for high-growth stocks.
