Tech stocks have been under pressure this week as investors adjusted their portfolios after a strong summer rally. The Nasdaq Composite fell 0.67% on Wednesday, while the broader S&P 500 dropped 0.24%. The decline comes despite tech-heavy stocks having steadily rallied in recent months, lifting the indices to record highs.
Investors are taking a wait-and-see approach ahead of Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole Economic Symposium on Friday, which could provide signals about potential rate-cutting. AI jitters have been testing Wall Street, with some investors saying they think the market might be in a bubble.
Sam Altman, CEO of OpenAI, recently stated that investors may be overexcited about AI and that it could provide value for the economy. However, researchers at MIT found that most companies testing new generative AI tools are seeing zero returns. These comments, combined with the report’s findings, have contributed to negative momentum in tech stocks.
Big Tech stocks, including Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, and Tesla, fell on both Tuesday and Wednesday, dragging down the broader market. Investors are shifting out of high-momentum tech stocks and toward more defensive sectors as they reassess the markets.
Source: https://edition.cnn.com/2025/08/20/business/us-stock-market-tech-ai-selloff