S&P500 and Nasdaq 100: US Stocks Risk Further Selling on AI Spending Doubts

The Dow slipped 228 points, while the S&P 500 fell 1.16% and the Nasdaq dropped 1.81%. Breadth leaned defensive, and volume ran slightly above recent averages — a sign this wasn’t just passive drift lower.

Is the AI Trade Losing Its Shine?

The pressure started in megacap tech. Oracle slid 5.4% after reports that Blue Owl Capital won’t back a planned $10 billion data center deal. That hit a nerve. The market has been fine with big AI checks — until it isn’t.

Nvidia fell 3.8% and Broadcom dropped 4.5%, dragging the chip index down nearly 4%. The message was clear: traders are questioning how much balance sheet strain the sector can absorb before returns become harder to justify. There’s growing concern that AI spending is feeding back into itself, with OpenAI sitting at the center of the loop.

Amazon slipped 0.6% after news it’s in talks to invest roughly $10 billion in OpenAI. The deal may strengthen its AI position, but the tape treated it as another reminder that the bill is still rising.

How Are Traders Responding to the Risk?

They’re stepping back rather than chasing dips — at least for now. Decliners outpaced advancers by a wide margin, especially on the Nasdaq. This wasn’t indiscriminate selling, but positioning felt lighter as traders reassessed exposure going into year-end.

Alphabet shares fell 3.2% after reports that Google is working with Meta to challenge Nvidia’s software edge. It’s ambitious, but the market focused on execution risk and timelines rather than the long-term vision.