US equity indices pared this week’s earlier strong gains as investors reassessed the likelihood of a Federal Reserve rate hike this year and questioned how much upside remains in the AI-driven rally. The S&P 500 slipped 0.6%, the Nasdaq fell 1.5%, and the Dow retreated 250 points from its record high. Semiconductor stocks, which had been at the forefront of the global equity upswing, declined sharply and reignited concerns that the AI sector may be overextended. Micron and SanDisk each dropped 8%, while Nvidia lost 3%.
In contrast, the major US tech “hyperscalers” within the Magnificent 7 extended their rebound after having significantly underperformed AI infrastructure names since mid-May. Microsoft, Amazon, and Alphabet all traded higher. Meta surged 8% after unveiling plans to build a cloud infrastructure business offering access to AI computing power and models. On the earnings front, Nike fell 3% as it issued a cautious outlook, citing mounting consumer anxiety.
