NEW YORK (AP) — The U.S. stock market is slipping again on Tuesday, following a global sell-off, as Nvidia, bitcoin and other Wall Street stars keep falling on worries that their prices shot too high. Home Depot is also dragging the market lower after saying it made less in profit during the summer than analysts expected.
The S&P 500 dipped 0.4%, following up on sharp swings the last couple weeks, and pulled further from its all-time high set late last month. The Dow Jones Industrial Average was down 373 points, or 0.8%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.
The struggles are a sharp turnaround from the months of relentless rallying for the U.S. stock market since April, when it sold off after President Donald Trump shocked the world with stiff tariffs. That rally, though, was so strong that critics said it may have carried stock prices too high, too fast and left the market at risk of a sharp drop. They pointed in particular to stocks swept up in the mania around artificial-intelligence technology, which have been surging at spectacular speeds.
Many big investors still seem to be expecting 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 high chance of damage, 45% pointed to an AI bubble. That beat out trouble in the bond market, inflation and trade wars.
The highest net percentage of investors in 20 years are also saying companies are “overinvesting,” according to the survey. The worry is that all the investment pouring into AI chips and data centers worldwide may not produce the kind of revolution that proponents have been predicting, or at least not as profitable a one.
Fervent demand for Nvidia’s AI chips have made it into Wall Street’s most valuable stock, and it briefly topped $5 trillion in value after more than doubling in four of the past five years. But the chip company’s 1.8% drop on Tuesday means it’s down 9.5% for the month so far.
Other high-flying areas of the market with their own evangelists have also been struggling lately. Bitcoin’s price briefly fell below $90,000 during the morning, down from nearly $125,000 last month.
Home Depot helped drag the market lower after falling 3.4%. It reported a weaker profit for the summer 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. But CEO Ted Decker also pointed to “consumer uncertainty and continued pressure in housing” for preventing an expected increase in demand from happening.
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.
Elsewhere on Wall Street, Cloudflare fell 2.8% after an issue at the internet infrastructure provider caused global outages for ChatGPT and other services.
In the bond market, Treasury yields eased. The yield on the 10-year Treasury sank to 4.10% from 4.13% late Monday.
In stock markets abroad, indexes tumbled across Europe and Asia, following up on Wall Street’s losses on Monday.
Japan’s Nikkei 225 dropped 3.2% after feeling extra pressure from a jump in Japanese government bond yields, reflecting rising risks as Prime Minister Sanae Takaichi prepares to boost government spending and push back the timetable for bringing down Japan’s huge national debt.
South Korea’s Kospi sank 3.3%, and France’s CAC 40 fell 1.8% for two of the larger drops worldwide.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
