Wall Street's Tech Tremor: AI Stock Surge Faces Investor Scrutiny

U.S. stock futures dropped as skepticism about technology valuations emerged following warnings from major banks about a potential market drawdown. AI-related stocks, previously surging, faced investor pullback amid concerns over their value and sustainability. Market volatility rose, influenced by differing expectations on monetary policy and forthcoming earnings reports.

On Tuesday, U.S. stock futures experienced a significant drop, sparking investor concerns about the valuation of technology stocks after warnings by chief executives of leading banks suggested potential market instability.

Notably, Wall Street indexes had recently achieved record highs propelled by robust quarterly results from major tech firms. Despite these gains, skepticism arose over the earnings and sustainability of AI-related investments, prompting a retreat among investors.

Amidst the market turbulence, tech stocks saw a decline, with Nvidia, Alphabet, and Amazon experiencing notable drops. As the market digested mixed signals from the Federal Reserve regarding interest rates, investors remained alert to pending earnings reports and other economic indicators.

(With inputs from agencies.)