Key Insights:
- US stocks sank on AI doubts amid Trump’s new import tariffs.
- S&P 500 dropped 1.2%, and the Nasdaq 100 fell 1.5%, led by losses in financials and consumer discretionary.
- Nvidia erased gains pre-earnings despite the upgrade.
On Monday, the S&P 500 was under intense selling pressure. Institutional investors turned their backs on risk-on assets.
Wider market anxiety was fueled by new import tariffs introduced by the Trump administration. These policies caused instant volatility in the global supply chains. This abrupt change was experienced in financial stocks.
The standard S&P 500 dropped 1.2% at the closing bell. The technology-intensive Nasdaq 100 fell 1.5% and marked a steep correction. AI doubts were mentioned by market players as the main trigger of the downfall. The capital ran out of the speculative growth areas and into the defensive areas.
Finance Sector Bled Amid Rising AI Doubts
The financial sector was the first to take a negative turn. The value of major banking institutions dropped at a high pace. Traders fear that integrating artificial intelligence will not yield instant profits. This scepticism cooled the so-called productivity miracle story that had been powering prices.
Algorithms in high-frequency trading responded to the change in sentiment. Bank stocks fell since credit issues were more concerning than possible tech efficiencies. According to analysts, AI scepticism is now affecting the traditional valuation models. Professional traders are reconsidering long-term growth forecasts of large lenders.
There were also huge headwinds in the consumer discretionary sector. The increase in tariffs would squeeze the retail margins in all directions. Investors are afraid that inflation will not end as anticipated. The S&P 500 could not establish a good floor. The internal breadth in the market was too negative during the session.
Nvidia Stalls as AI Skepticism Mounts
Nvidia remains the focus of crypto and tech analysts. The semiconductor giant lost its initial gains altogether, as AI Skepticism rose. The stock did not sustain an upward momentum even after it was upgraded before the market. Players in the market are becoming extremely cautious.
It has an RSI of 56.13, indicating a neutral to slightly bullish position. Investors are cashing in on the profits before the next Nvidia earnings report.
The broader semiconductor index reflected Nvidia’s poor performance. There is apprehension that the hardware cycle has peaked. The worries about AI remain persistent and are still hanging around the necks of the Magnificent Seven cohort. This change implies a transformation into value-based assets.
U.S. Stock Market Price Analysis
The S&P 500 technically broke the 50-day moving average. This collapse triggered automatic sales in the major markets. The asset dropped over 1.20% and was trading at $6,833. The spikes in volume with the sell-off pointed to the strong conviction of the bears.
The Nasdaq 100 had a bearish head and shoulders structure. Should the neckline rupture, it was most likely to have more downside.
The 10-year Treasury note yield rose slightly throughout the session. This action increased tech companies’ capital expenditures. AI questions amongst venture capitalists are usually exacerbated by elevated interest rates. The relationship between equity weakness and news about tariffs is very high.
Nvidia Earnings and the Path Forward
All eyes are now turning to the next fiscal report amid AI doubts. Nvidia’s future income growth will probably determine the market’s future trends. Analysts anticipate a strong beat to restore investor confidence. Less of this would induce a more fundamental correction in the market.
The emerging concerns about AI may indicate the need to be more conservative. Crypto analysts add that blockchain-AI synergies are also stalling. The overlap of fiscal policy and tech fatigue creates a complex environment.