Tech stocks led declines on Wall Street, with AI worries sparking debate about its future. Nasdaq Composite fell 2.2% in the last two days, the worst since August 1st. Semiconductor index down 1.4%, IT sector second biggest decliner in S&P 500, sliding 1% on Wednesday. Market selloff attributed to various factors, including technical pullback and government interference fears.

Analysts cited concerns over AI boom durability, with MIT study highlighting weak corporate returns and excess buildout. Market strategists suggest a possible rotation from growth to value stocks, defense posturing around economic weakness. Technology stocks up 40% since April lows, leading to a potential rotation into other sectors. Nvidia and other blue-chip tech stocks seeing drawdowns amid speculative edge selling pressure.

U.S. tech stock swoon attributed to multiple compression and margin math, with new uncertainties in AI space. Names like Nvidia, AMD, and Palantir fell hard, impacting market sentiment. DeepSeek’s update causing a tech-market pullback, raising concerns about AI capital spending. Market vulnerability evident with slightest bad news scent, causing names to retreat on valuation concerns and corporate restructuring.

Rotation seen in tech sector, healthy pullback allowing markets to reorient. Tech stocks overbought, leading to profit-taking after strong earnings runup. Potential rotation into smaller-cap, healthcare, or consumer staples expected but likely a short-term trend. Money flow expected to return to tech in the coming months as profit-taking subsides.

Market decline attributed to profit-taking, temporary rebalancing, and risk squaring. Potential reversal if Federal Reserve cut mentioned on Friday. Dip buyers stepping in to recover losses, with tech selloff expected to reverse quickly. Tech-led decline linked to profit-taking, risk squaring ahead of Fed Chair Powell’s speech.

Pullback after market rally seen as normal and healthy, potential rotation out of tech into undervalued sectors like biotech, healthcare, and small caps. Market volatility tied to uncertainties surrounding AI, government interference, and profit-taking. Rotation into other sectors expected if selling intensifies, but tech likely to regain momentum in the future.

Read more at Yahoo Finance: Nasdaq drops for 2nd day as AI jitters rattle tech investors