Tech Stocks Tumble Amid AI Valuation Concerns

U.S. stocks fell on Wednesday, led by drops in technology companies like Advanced Micro Devices and Palantir, as concerns mounted over high valuations and the stability of Wall Street's AI-driven gains. Investors eagerly await Alphabet's quarterly results to assess the impact of its substantial AI investments on revenue growth.

Advanced Micro Devices faced a sharp decline after it projected lackluster quarterly revenue, indicating competitive challenges against AI leader Nvidia, which also saw declines. Meanwhile, the semiconductor sector ended the day significantly lower.

The shift from AI stocks to more affordable options benefited some sectors, with the S&P 500 value index on the rise, even as growth stocks saw declines. Government jobs data delays and lower-than-expected private payrolls report added to market tensions.