U.S. tech selloff erases $1 trillion as AI spending scrutiny deepens

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US tech selloff & AI scrutiny

Highlights

The U.S. tech sector loses $1 trillion in market value as the Nasdaq falls 2.86%, led by Intel's 28.5% plunge and Nvidia losing its $5 trillion capitalization.
Cboe Volatility Index surges 12.91% intraday, approaching 24, signaling increased caution amid mounting concerns around AI-related capital expenditures and disappointing tech earnings.
Defensive sectors like financials, healthcare, and energy rise, with healthcare reaching a 52-week high, while U.S. Treasury yields fall as investors seek safety amid rising energy prices and geopolitical tensions.

Market retreat follows weak tech earnings

As reported by Cboe Global Markets, this week’s selloff in technology shares follows earnings from AI-related tech and semiconductor companies that disappointed investors and intensified doubts over the economics of large capital outlays tied to artificial intelligence.

All three major U.S. indices lose ground, though they finish Friday above intraday lows. The Nasdaq Composite falls 2.86%, the S&P 500 Index declines 1.82%, and the Dow Jones Industrial Average slips 1.09%, with weakness in several technology names weighing on the blue-chip benchmark.

Among the steepest declines, Intel drops 28.5%, its worst intraday fall since 1974, according to CNBC. SanDisk loses 13.8%, Micron falls 5.3%, Marvell slides 10%, and Nvidia drops 4.2%, losing its $5 trillion market capitalization in the process.

The Cboe Volatility Index, or VIX, signals growing caution by nearing 24 in intraday trading before ending the session just below 20, up 12.91% on the day. Cboe says the market response does not necessarily signal the end of the AI boom, but rather a shift in how Wall Street weighs spending against still-uncertain returns.

Defensive sectors gain as investors seek safety

Despite the broad technology retreat, the selloff is not uniform across the market. Financials, healthcare and energy all finish solidly higher within the S&P 500, while healthcare reaches a 52-week high after strong earnings from pharmaceutical and biotechnology companies.

Investors also move into U.S. Treasury bonds, a traditional haven during periods of market stress. The 10-year yield falls to 4.92% and the 30-year yield drops to 5.31% as bond prices rise.

Other market pressures add to the day’s volatility. WTI crude climbs more than 2.2% to above $104 a barrel, while Brent rises 2.45% to just below $118 a barrel as security risks escalate in the Middle East and reports point to possible further conflict after next week’s midterm elections.

Attention now shifts to the next round of corporate results, which could shape sentiment toward technology, healthcare, energy and consumer spending. Companies due to report next week include Apple on Monday; Advanced Micro Devices, Amgen and Pfizer on Tuesday; McDonald’s and Qualcomm on Wednesday; and ConocoPhillips on Thursday.

Micron’s bearish technical setup after its 2026 rally was the focus of our earlier article, highlighting a breakdown below a rising wedge pattern on the weekly chart. We noted weakening momentum signals (RSI and MACD) and outlined key downside support zones, while explaining that a sustained move back above major resistance could invalidate the bearish view.

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