US equity markets closed lower on Wednesday, with the Nasdaq Composite falling 0.8% and the S&P 500 declining 0.4%.
The sell-off was driven by a combination of softer-than-expected US retail sales data and renewed investor anxiety regarding the high valuations of major artificial intelligence stocks.
2% the previous day, as heavy selling in key AI names weighed on performance across the board.
The tech-heavy Nasdaq bore the brunt of the selling pressure, extending a broader downturn that has plagued global technology shares since March.
The decline marks a continuation of the repricing cycle that saw the index drop 2.2% the previous day, as heavy selling in key AI names weighed on performance across the board.
Retail sales data provided a fresh catalyst for risk-off sentiment, highlighting potential headwinds for consumer-facing businesses and raising questions about the durability of economic growth.
This macroeconomic softness compounded existing fears that the AI investment cycle may be losing momentum, challenging the sustainability of current price-to-earnings multiples in the sector.