More drops for tech stocks weigh on Wall Street
U.S. tech stocks, particularly those tied to the AI boom, fell sharply on Wall Street Wednesday, dragging down major indexes like the S&P 500 and Nasdaq, while inflation data eased some market pressure. Super Micro Computer and Micron Technology saw steep declines after announcing stock sales, and global markets in Asia and Europe also experienced losses amid uncertainty over U.S.-Iran oil negotiations and Federal Reserve rate expectations.
Wall Street’s tech stocks continued their decline Wednesday, with the S&P 500 slipping 0.6% and the Nasdaq dropping 0.8% as AI-linked shares pulled indexes lower. Companies like Super Micro Computer fell 13.5% after announcing plans to raise $7 billion through stock sales, while Micron Technology dropped 2.8%, reducing its year-to-date gain to 218.2% from nearly 280% a week earlier. The downturn followed a recent surge in AI stocks, which had driven market gains but now face concerns over overvaluation. Early trading saw steeper losses, but an inflation report released before markets opened helped stabilize sentiment. While inflation rose to its highest level in three years, economists had anticipated this, and an underlying inflation measure slowed more than expected, easing Treasury yields slightly. The 10-year Treasury yield dipped to 4.52% from 4.53%, and the 2-year yield fell to 4.11% from 4.13%, reducing some pressure on stocks. Traders had previously increased bets on a potential Federal Reserve rate hike this year, though Wednesday’s data slightly tempered those expectations. Oil prices remained volatile, with Brent crude rising 1.1% to $92.43 after President Donald Trump warned Iran over stalled U.S. negotiations. Global markets reflected the uncertainty, with South Korea’s Kospi falling 4.5% due to losses in tech giants like Samsung Electronics and SK Hynix. Japan’s Nikkei 225 dropped 1.9% after producer price data showed inflation pressures. European indexes also pared losses following the U.S. inflation update, though broader market caution persisted amid mixed economic signals.
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