Stocks fell again on Tuesday after tech shares continued to slide on concern about valuations of artificial intelligence-related stocks and as bitcoin dropped briefly below $90,000, a sign of reduced risk-taking by investors.
The Dow Jones Industrials index surrendered 536.46 points, or 1.2%, to 46,054.34, putting it on pace for its fourth straight losing session, which would be its longest slide since August.
The S&P 500 faded 73.98 points, or 1.1%, to open at 6,598.43.
The NASDAQ subtracted 369.37 points, or 1.7%, to 22,330.66
AI chip darling Nvidia fell 3%. Fellow “Magnificent Seven” members Amazon and Microsoft also came under pressure. Nvidia has fallen 10% this month leading up to the chipmaker’s third-quarter results due after Wednesday’s close.
The company, which is reporting toward the end of a strong earnings season, has been at the center of a debate about the strength of the AI-powered market rally this year, as concerns have grown about pricey tech valuations and the soundness of AI fundamentals due to a boom in Big Tech debt offerings.
A big AI partnership announced Tuesday failed to lift related stocks like such deals have in the past. AI-startup Anthropic said it will spend $30 billion with Microsoft and, in turn, Microsoft and Nvidia will invest billions in Anthropic. Nvidia and Microsoft remained deep in the red following the deal.
Blue Owl, a private credit lender that’s made big loans for AI data centers, continued to fall in the premarket after dropping 6% in the prior session. Earlier this month, Blue Owl said it was merging two private credit funds, a private and publicly-traded one. Investors in the private fund face big losses and will be blocked from redeeming their money until next year, according to reports.
Alphabet CEO Sundar Pichai told the BBC that part of today’s AI boom did have some “irrationality” and that no company “is going to be immune” if the bubble burst.
Bitcoin dropped below $90,000 on Tuesday, continuing its slide from a record $126,000 reached in early October. Many tech investors also have large cryptocurrency holdings so the decline raised worries that a bigger stock market drop may follow. Bitcoin was last trading just above $91,000.
Outside of tech, Home Depot shares declined after the home improvement reported an earnings miss and cutting its full-year outlook.
Prices for the 10-year Treasury edged up slightly, lowering yields to 4.09% from Monday’s 4.14%. Treasury prices and yields move in opposite directions.
Oil prices declined 43 cents to $59.48 U.S. a barrel.
Gold prices stepped back $11.50 to $4,063.10 U.S. an ounce.
