The Nasdaq sell-off deepened as doubts over AI spending, weak chip earnings and the threat of tighter AI regulation hit U.S. tech stocks.
Fawad Razaqzada, StoneX Media Market Analyst, explains why technology stocks missed the post-midterm rally and what the Nasdaq chart shows after the latest drop.
AI and tech stocks are selling off because cash spending on artificial intelligence is still surging while AI-driven profits fall short of lofty analyst expectations. The U.S. midterm elections added pressure, with many newly elected Democratic governors, attorneys general and lawmakers pledging to slow or halt construction of AI data centers. Semiconductor stocks led the decline, with Arm Holdings falling sharply after its earnings, Nvidia down 8% and Tesla down about 10%. On the chart, the Nasdaq has formed a sequence of lower highs and lower lows since its October peak, and the 200-day moving average sits among the levels traders are watching.
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