Wall Street was volatile over the weekend, with AI stocks plummeting.

Phố Wall kết thúc thấp hơn; nỗi lo về bong bóng AI và lạm phát khiến các nhà đầu tư rời bỏ

Pressure from AI pricing and rising bond yields dragged Wall Street into the red.

Growing concerns about the overvaluation of AI, coupled with increasing pressure from US Treasury yields and fears of inflation not being fully controlled, caused major indices to fall across the board, marking their sharpest decline in weeks.

At the close of trading, the S&P 500 fell approximately 1.1%, closing at 6,827.41 points, its deepest decline in three weeks. The Nasdaq Composite, a key indicator of the health of the technology sector, bore the brunt of the decline, losing 1.7% to close at 23,195.17 points. Meanwhile, the Dow Jones Industrial Average fell less sharply, losing 0.5% to 48,458.05 points, highlighting the clear divergence between high-growth technology stocks and traditional blue-chip stocks.

Selling pressure in the technology sector was the main reason dragging down the overall market. Broadcom, one of the stocks considered a "big bet" on the AI trend, plummeted after the company released a less optimistic earnings outlook than expected. Specifically, Broadcom shares fell by 11.4% in the session, becoming the biggest drag on the S&P 500. Warnings about lower future profit margins have raised concerns that the wave of investment in AI may be overvalued compared to its actual profitability potential.

The negative effects quickly spread to the entire semiconductor and AI sector. Nvidia, the leading AI chip company and also the world's largest company by market capitalization, fell 3.3%, becoming the second-largest drag on the market. The Philadelphia Semiconductor Index (.SOX) lost as much as 5.1%, recording its weakest trading session since October 10th, with all component stocks in the red. AMD and many other names in the chip sector also did not escape the decline, reflecting the pessimistic sentiment that has enveloped the group of stocks that had led the market for a long time.

The day before, Oracle had also disappointed by announcing weak financial forecasts, causing its stock to fall nearly 11% on Thursday and continue to drop another 4.5% on Friday. Although Oracle denied Bloomberg's report about delays in data centers serving OpenAI, this was not enough to reassure investors. The consecutive developments from Broadcom and Oracle revived memories of the "tech bubble," when stock prices surged based on future expectations rather than current earnings.

Not only the big players, but many stocks that had previously benefited from the AI trend also experienced sharp sell-offs. SanDisk fell 14.7%, becoming the biggest loser in the S&P 500 in terms of percentage. AI infrastructure companies also faced significant pressure, with CoreWeave dropping 10.1% and Oklo losing as much as 15.1%. This development shows that investors are collectively reassessing the risks of investments tied to the AI narrative.

From a macroeconomic perspective, US Treasury yields rose again after a group of Federal Reserve officials expressed opposition to easing monetary policy too soon. Although the Fed has cut its key interest rate for the third consecutive year to support economic growth, some policymakers remain concerned that inflation is still too high to sustainably ensure lower borrowing costs. The slight increase in 10-year Treasury yields during the session reduced the attractiveness of technology stocks, a sector sensitive to interest rates, as the present value of future cash flows is discounted more sharply when the cost of capital rises.

According to Anthony Saglimbene, market strategist at Ameriprise, the market correction is not entirely unexpected. He argues that the S&P 500 and Dow Jones just set record closing highs on Thursday, while investors are awaiting a series of key economic data releases next week, including the non- farm payrolls report, consumer inflation, and retail sales figures. “The market is probably becoming more cautious ahead of the big numbers,” Saglimbene stated, adding that with the disruptions in the AI narrative, money is tending towards more defensive sectors.

In fact, the rotation of money flow was evident during the session. Six of the 11 sectors in the S&P 500 closed lower, led by technology with a 2.9% decline. Conversely, consumer staples and defensive stocks recorded 0.9% gains, indicating investors are prioritizing stability amid increasing uncertainty. The Dow Jones declined less sharply thanks to support from value and consumer stocks, with McDonald's and Chipotle recording positive gains, somewhat limiting the index's decline.

In addition, the market still showed some isolated bright spots. Lululemon Athletica shares rose nearly 10%, leading the S&P 500 gainers after the company raised its full-year earnings forecast and announced CEO Calvin McDonald would be stepping down. Meanwhile, Costco shares remained virtually unchanged despite better-than-expected quarterly revenue and earnings, reflecting increasingly selective investor sentiment.

Technically, the number of declining stocks significantly outnumbered the number of rising stocks on both the NYSE and Nasdaq, indicating weakening market breadth. Trading volume reached over 18 billion shares, higher than the 20-day average, reflecting increased selling pressure at the end of the week.

Despite a pullback on December 12th, the major indices maintained significant gains for 2025, reflecting the previous sustained upward trend. However, this trading session indicated that the market is entering a clearer phase of psychological adjustment. With the outlook for technology earnings, AI valuations, and Fed policy remaining uncertain, analysts warn that if confidence doesn't improve soon, the sell-off could continue, while value and defensive stocks are likely to continue attracting safe-haven investments in the coming period.

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