By STAN CHOE, AP Business Writer
NEW YORK (AP) — The U.S. stock market fell following on Tuesday, as worries keep dogging , bitcoin and other Wall Street stars that their prices shot too high.
After quickly sliding to a morning loss of 1.5%, the S&P 500 clawed back nearly all of it before sinking again. It finished with a fall of 0.8% and pulled further from set late last month. The Dow Jones Industrial Average lost 498 points, or 1.1%, and the Nasdaq composite sank 1.2%.
Nvidia was again the heaviest weight on the market, and its drop of 2.8% brought its loss for the month so far to more than 10%. Thatap a steep enough fall that Wall Street has a name for it: .
What Nvidia does matters disproportionately to savers’ 401(k) accounts because its immense size means itap the most influential stock on Wall Street. It single-handedly steers the direction of the S&P 500 some days, after fervent demand for its chips helped it briefly top $5 trillion in total value.
The U.S. stock marketap are a sharp turnaround from its nearly relentless rally since April, when Wall Street last after President Donald .
That rally was so strong that critics say it may have , too fast and left the . They point in particular , which have been surging at spectacular speeds for years.
Nvidia’s price more than doubled in four of the last five years, for example, while Palantir Technologies’ stock more than doubled in the first six and a half months of this year.
Many big investors still seem to expect stock prices to rise further, according to the latest monthly survey of global fund managers by Bank of America Global Research. But when asked what the No. 1 risk for the market is, one with a lower probability of happening but a chance of very big damage, 45% pointed to an AI bubble. That beat out potential trouble in the bond market, inflation and trade wars.
A record percentage of investors is also saying companies are “overinvesting,” according to the survey. The worry is that all the dollars pouring into AI chips and data centers worldwide may not produce the kind of revolution that AI proponents have been predicting, or at least not as profitable a one.
Other high-flying areas of the market with their own evangelists have also been struggling lately. below $90,000 in the morning, down from nearly $125,000 last month. It later recovered some of its losses and climbed back toward $93,000.
Home Depot also helped drag the market lower after falling 6%. It reported a than analysts expected and cited a variety of reasons. Chief among them was a lack of storms, which would have driven customers to buy more home-improvement supplies. CEO Ted Decker also pointed to “consumer uncertainty and continued pressure in housing” for preventing an expected increase in demand.
Reporting stronger profits is one of the ways a company can make its stock price look less expensive, because stock prices tend to track with earnings over the long term. Thatap raising the stakes for Wednesday’s profit report from Nvidia, which could either help halt its stock’s slide or worsen it.
Elsewhere on Wall Street, Cloudflare fell 2.8% after an earlier issue at the internet infrastructure provider for ChatGPT and other services.
All told, the S&P 500 fell 55.09 points to 6,617.32. The Dow Jones Industrial Average dropped 498.50 to 46,091.74, and the Nasdaq composite sank 275.23 to 22,432.85.
In the bond market, Treasury yields likewise oscillated through the day. The yield on the 10-year Treasury eventually eased to 4.11% from 4.13% late Monday.
Yields have been swinging amid doubts about whether its main interest rate at its next meeting in December, something that traders had earlier seen as very likely. What the Fed does is critical for the market because stock prices ran to records in part because of expectations for continued cuts to rates.
The Fed has cut rates twice already this year in hopes of shoring up a . But lower interest rates can make inflation worse, and above the Fed’s 2% target.
In stock markets abroad, indexes tumbled across Europe and Asia.
South Korea’s Kospi sank 3.3%, Japan’s Nikkei 225 dropped 3.2% and France’s CAC 40 fell 1.9% for some of the world’s larger drops.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
