Chipmakers Slip as AI Rally Faces New Challenges

The S&P 500 closed lower, impacted by losses in chipmakers like Micron Technology due to increasing skepticism about Wall Street's AI-driven surge. Reports of China's DeepSeek developing its AI chips added to market jitters. Major indexes, including the Nasdaq and Dow, also fell amidst these concerns.

The S&P 500 index saw a decline on Tuesday, primarily driven by setbacks in chipmakers such as Micron Technology. This downturn comes amid growing concerns about the longevity of the AI-fueled stock market rally.

The drop in chip stocks, which extended to both Asian and U.S. markets, followed a less-than-stellar response to Samsung Electronics' high-earnings report. Meanwhile, news of Chinese startup DeepSeek working on its AI chip to minimize reliance on Nvidia and Huawei heightened market apprehensions.

As the PHLX chip index fell, key U.S. stock indexes including Nasdaq and Dow Jones also experienced a dip. This market turbulence highlights investors' anxiety about overvalued shares in the wake of significant AI data center investments.