The artificial intelligence rally that has defined equity markets for months is showing clear signs of fatigue, with investor sentiment shifting sharply as volatility surges across tech-heavy indices.
The broad-based decline, which began in US trading sessions, has quickly spread to Asian and European markets, signaling a potential turning point in the market cycle.
US equity markets opened lower on Tuesday, marking a distinct break from the previous months of steady gains.
The selling pressure was not confined to a single sector but reflected a wider reassessment of valuations, particularly among the biggest beneficiaries of the AI hype cycle.
Chips and semiconductor stocks, which have been the primary engines of the rally, are facing increased scrutiny as traders question the sustainability of current multiples.
The shift in mood is evident in the heightened volatility, which is testing investor nerves.