US equity markets closed sharply lower on Tuesday, driven by a broad-based selloff in the semiconductor sector as investors grew increasingly skeptical of the sustainability of artificial intelligence spending.
The Nasdaq Composite fell 2.2%, with major AI-related stocks bearing the brunt of the selling pressure.
The decline extended losses seen across global equity markets, where technology shares have struggled to find support amid mounting valuation concerns.
The rout in chipmakers reflects a shift in market sentiment regarding the capital expenditure cycle for AI infrastructure.
Traders are bracing for a more cautious outlook from corporate leaders, with fears that the rapid pace of investment may not be matched by near-term revenue growth.
This repricing has spilled over into broader tech indices, weighing on the performance of the entire sector.