Wall Street concluded Wednesday’s trading session on a weaker note, with key U.S. stock market indices retreating. This decline was primarily triggered by a significant drop in shares of Advanced Micro Devices (AMD), Palantir, and several other prominent technology companies.
Investors displayed growing apprehension regarding what they perceive as rich valuations, prompting widespread questioning about whether the robust artificial intelligence (AI) stock rally on Wall Street had finally reached its peak.
According to Reuters, the S&P 500 index dipped 0.51 percent, closing at 6,882.72. The Nasdaq experienced a sharper decline, falling 1.51 percent to 22,904.58. In contrast, the Dow Jones Industrial Average defied the broader trend, gaining 0.53 percent to finish at 49,501.30. Despite the S&P 500’s overall weakening, a mixed picture emerged within the index; seven of its 11 sectoral indices registered gains, led by the energy sector, which surged 2.25 percent, followed by the materials sector with an increase of 1.8 percent.
Alphabet’s shares saw an initial decline of nearly 2 percent ahead of its quarterly earnings report, which was scheduled for release after market close. However, following the trading session, the stock rebounded by approximately 2 percent. This turnaround came after the company announced plans for aggressively increasing spending as it deepens its investments in the highly competitive AI landscape.
Meanwhile, AMD plunged a substantial 17 percent after the chipmaker delivered a quarterly revenue forecast that disappointed investors and signaled challenges in competing with AI giant Nvidia. Nvidia’s stock itself fell 3.4 percent, while the broader PHLX semiconductor index dropped 4.4 percent. Palantir also took a nearly 12 percent hit, reversing the sharp gains made the previous day, which had been fueled by strong quarterly sales from the AI data company.
“The scale of this infrastructure build-out is unprecedented, and the rate of adoption of AI tools by both consumers and businesses is also unprecedented. The stock market is really struggling to price stocks and imagine what the future will look like. The market suddenly became skeptical and worried,” commented Jes Ellerbroek, a portfolio manager at Argent Capital.
A number of software companies further contributed to the day’s declines amid concerns that the rapid advancements in AI could disrupt established players in the industry. Shares of Snowflake fell 4.6 percent, and Datadog weakened by 3.3 percent.
“If you have old, outdated, complicated software, it becomes low-hanging fruit for AI. We’re somewhat bearish on the software sector in general, with this AI push,” stated Josh Chastant, a public investment portfolio manager at GuideStone Funds, highlighting the potential vulnerability of legacy systems to AI innovations.
In a notable market rotation, investors divested from AI-related stocks and shifted their focus towards companies with more modest valuations, many of which had not participated in the tech rally of recent years. This trend saw the S&P 500 value index rise for the fifth consecutive day, while the S&P 500 growth index declined.
Trading volume across U.S. exchanges was notably high, with 24.6 billion shares changing hands, significantly above the 20-session average of 19.9 billion shares, indicating heightened market activity.
Amidst the broader market weakness, some companies provided counter-movements. Super Micro Computer shares surged 13.8 percent after the company raised its annual revenue projections, citing sustained demand for AI-optimized servers as businesses boost data center capacity. Furthermore, helping to cushion the S&P 500’s overall decline, pharmaceutical firm Eli Lilly’s stock jumped approximately 10 percent after the company projected 2026 earnings that surpassed Wall Street’s expectations.
In other economic news, the highly anticipated U.S. employment report for January, initially scheduled for release on Friday, January 30th, was delayed. This postponement was due to a four-day partial government shutdown that concluded on Tuesday, February 3rd.
Separately, the national ADP employment report released on Wednesday, February 4th, indicated that U.S. private sector job growth in January was lower than anticipated. This was primarily attributed to job losses in professional and business services as well as the manufacturing sector. Despite the S&P 500’s negative close, within the index, the number of advancing stocks outnumbered declining ones by a ratio of 2.6 to 1, suggesting underlying pockets of strength.
The S&P 500 saw 93 stocks reach new 52-week highs while 23 touched new lows. The Nasdaq, reflecting its more pronounced decline, recorded 218 new highs but a higher number of 318 new lows.
Summary
Wall Street ditutup melemah pada hari Rabu, dipicu oleh penurunan signifikan pada saham Advanced Micro Devices (AMD), Palantir, dan beberapa perusahaan teknologi lainnya. Investor khawatir terhadap valuasi yang tinggi, mempertanyakan apakah reli saham kecerdasan buatan (AI) telah mencapai puncaknya. Indeks S&P 500 dan Nasdaq masing-masing turun 0,51% dan 1,51%, meskipun Dow Jones Industrial Average berhasil menguat 0,53%.
AMD anjlok 17% setelah proyeksi pendapatan yang mengecewakan, sementara Nvidia dan Palantir juga mengalami penurunan. Kekhawatiran bahwa kemajuan AI dapat mengganggu pemain lama turut menekan saham perangkat lunak seperti Snowflake. Namun, terjadi rotasi pasar di mana investor beralih dari saham terkait AI ke perusahaan dengan valuasi lebih moderat, sementara Super Micro Computer dan Eli Lilly menunjukkan penguatan signifikan.