Chip Stock Weakness Raises Doubts on Wall Street AI Rally

The S&P 500 and Nasdaq fell on Tuesday due to weakening chip stocks, despite Samsung's strong earnings. Concerns over China's DeepSeek developing its own AI chip and volatility among major chip companies contributed to market uncertainty. Meanwhile, oil prices increased amid geopolitical tensions in the Strait of Hormuz.

On Tuesday, the S&P 500 and Nasdaq experienced declines, primarily due to a downturn in chip stocks. This came despite impressive earnings from Samsung, which nonetheless triggered market concerns.

A report indicating that Chinese startup DeepSeek is developing its AI chip intensified anxiety on Wall Street, with Nvidia falling 1.8% and the Philadelphia SE Semiconductor index hitting a four-week low.

Meanwhile, geopolitical tensions caused oil prices to rise, and nine of the eleven S&P 500 sectors traded higher, with consumer staples and healthcare leading the gains.