The seemingly sturdy U.S. stock market has begun to wobble. Its months’-long tech-driven rally may be running out of steam amid growing wariness about the artificial intelligence boom and broader uncertainty about the U.S. economy\u2019s outlook.<\/p>\n
On Tuesday, the S&P 500, one of the broadest measures of U.S. stocks, fell about 0.8%, its fourth-straight day of losses. The Dow Jones Industrial Average shed nearly 500 points, or more than 1%, while the tech-heavy Nasdaq closed down 1.2%. <\/p>\n
Several computer chip makers that have powered AI’s rise this year led the drawdown, as the PHLX Semiconductor Sector declined more than 2%. Meanwhile, Home Depot, seen as a bellwether for the broader consumer sector, fell more than 6% after it cut<\/a> its earnings outlook. <\/p>\n The longer-term direction of the market and the economy writ-large could be determined in the coming days by a bevy of critical data set for release, including a long-delayed jobs report and earnings by Nvidia, the company at the heart of the artificial intelligence boom.<\/p>\n \u201cMarkets are bracing for a turbulent week as major economic data returns and investor anxiety grows around interest rates, tech earnings and cryptocurrency weakness,\u201d Lukman Otunuga, senior market analyst at FXTM global brokerage group, said in a statement. <\/p>\n This year\u2019s stock gains have been fueled largely by companies investing in AI \u2014 especially the group of tech stocks known as the “magnificent seven,” or Mag 7, whose success this year has been so overwhelming that they have often been able to overcome weaknesses elsewhere and power entire indexes higher.<\/p>\n Among the Mag 7, Nvidia has proven the pacesetter. This month, its shares have fallen 10%, as many investors looked to take profits on what has otherwise been a year of outsized gains.<\/p>\n While Wall Street generally expects the company to report steady gains Wednesday, some high-profile names have begun selling their Nvidia stock or betting against the company. They include venture capitalist Peter Thiel, Japanese conglomerate SoftBank Group and Michael Burry, the investor made famous by the movie \u201cThe Big Short.”<\/p>\n For all the support the AI investment boom has provided to markets, the U.S. economy is still heavily dependent on consumer spending \u2014 and assessments of household financial stress remain mixed. The government shutdown, which officially ended last week, didn\u2019t help<\/a>.<\/p>\n On Tuesday, Home Depot reported quarterly results that missed estimates, something it blamed on more customers shying away from big-ticket items. <\/p>\n \u201cWe believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand,\u201d CEO Ted Decker said in a statement. <\/p>\n Others are more upbeat. <\/p>\n