US equity markets suffered a sharp decline on Tuesday, with the Dow Jones Industrial Average dropping 395.32 points as selling pressure intensified across technology-heavy indices.
The Nasdaq Composite and the S&P 500 both fell to levels not seen in over a week, marking a significant extension of recent weakness in global equities.
The rout was driven primarily by losses in semiconductor stocks, which have been under pressure amid growing investor skepticism regarding the sustainability of artificial intelligence capital expenditure.
Market participants are increasingly questioning whether current spending levels can justify the valuations of key tech names, leading to a broad-based rotation out of growth assets.
Compounding the equity weakness is a shift in sentiment toward the Federal Reserve’s policy path.
Traders are pricing in a more hawkish stance from the central bank, with fears that persistent inflationary pressures or strong economic data could delay anticipated rate cuts.