Wall Street Stumbles as AI Safety Fears Hit Chipmakers

Nvidia led the retreat, shedding 3.4% of its value, while Micron Technology took a steeper hit with a decline exceeding 5%. Broadcom and Advanced Micro Devices also retreated, both falling more than 4% as the market recalibrated expectations for AI-driven growth. This sell-off occurred against a backdrop of macroeconomic pressure, as the benchmark 10-year Treasury yield briefly climbed above 5%.

Traders are now bracing for Wednesday’s Federal Reserve meeting, where a 25-basis-point interest rate hike is considered a near-certainty by 90% of the market. With oil prices rising and inflation remaining a persistent threat, the combination of cooling AI sentiment and the prospect of sustained high borrowing costs has forced investors to pivot away from high-growth tech assets.