Overview

• Tech and AI-linked shares paced a two-day slide that left the Nasdaq down about 2.4%, with the S&P 500 lower for a fourth straight session.
• Palantir fell more than 9% Tuesday and slipped again Wednesday after Citron Research said the stock’s price is disconnected from fundamentals and highlighted heavy insider selling.
• Investor caution intensified after OpenAI CEO Sam Altman said the market may be in an AI bubble and an MIT Nanda Initiative study reported limited current returns from generative AI projects.
• Policy worries weighed on chip and AI names as reports pointed to possible U.S. government equity stakes in semiconductor firms and revenue-sharing arrangements tied to CHIPS Act support.
• A broader rotation into defensive sectors took hold as traders reduced exposure to high-momentum names before Fed Chair Jerome Powell’s Jackson Hole speech, while Palantir’s expanded Fujitsu deal in Japan failed to stem its slide.