S&P 500, Nasdaq end sharply lower as revived AI doubts ignite tech selloff - Reuters

A renewed wave of skepticism toward artificial intelligence valuations drove a sharp selloff in U.S. equities, with the S&P 500 and Nasdaq closing markedly lower, according to Reuters. The move reflects investors reassessing the assumptions underpinning the market's AI-driven rally, particularly the timeline for translating heavy capital spending on AI infrastructure into earnings.

The concentration of AI-related names in the major indexes helps explain the outsize reaction. When sentiment shifts around a handful of large technology companies, the effect can ripple across broad benchmarks, since those firms carry substantial index weight. A selloff in that cohort can therefore move headline index performance even when the rest of the market is steadier.

What to watch: upcoming earnings commentary on AI spending and monetization, guidance from major cloud and chip companies, and whether the pullback broadens beyond technology. Investors may also monitor whether volatility persists or fades as the market digests whether recent AI enthusiasm was priced ahead of fundamentals.