Tech stocks could remain under pressure after they led Wall Street lower on Tuesday, with the Nasdaq dropping 1.4% and the S&P 500 slipping 0.6%.
Losses were widespread among chipmakers, where Nvidia slid 3.5%, AMD fell more than 5%, and Broadcom lost more than 3%. Palantir was the weakest S&P 500 performer, plunging 9%.
The selloff reflected investor caution ahead of the Federal Reserve’s annual Jackson Hole symposium, where Chair Jerome Powell is due to speak on Friday. Markets still price in two quarter-point cuts this year, the first expected in September. A more hawkish tone could weigh further on equities.
AI-related stock valuations also drew scrutiny after their recent gains. OpenAI’s Sam Altman warned of a bubble, reflecting the cautious sentiment. Still, corporate news provided pockets of support as Intel surged on a USD 2 billion SoftBank investment.
Looking ahead, investors are also weighing the impact of potential political intervention after US officials suggested taking equity stakes in US chipmakers. Such measures could bolster state support for artificial intelligence development, potentially accelerating capital flows and strengthening long-term prospects for the sector. At the same time, it could raise some concerns about competition and government interventionism.
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