Tech Stocks Tumble Amid AI Bubble Concerns and Rising Treasury Yields

The S&P 500 and Nasdaq closed down over 1% as investor concerns about a potential AI bubble and rising U.S. Treasury yields grew. Broadcom and Oracle shares fell due to margin concerns and weak forecasts, while labor market and inflation data loom ahead.

The S&P 500 and the Nasdaq witnessed a significant drop, with both indices falling by over 1% as investors shifted focus from technology to other sectors. The tumble was primarily driven by Broadcom and Oracle, whose shares fell amid heightened concerns over a looming AI bubble and climbing U.S. Treasury yields.

Broadcom shares plummeted 11.4% following profit margin warnings, while Oracle dipped 4.5% on the heels of a weak financial forecast. The fall in big tech shares also cast a shadow over the broader semiconductor industry, with every stock in the Philadelphia semiconductor index losing ground.

Despite the tech sector's downturn, the market overall showed mixed results, with defensive consumer staples gaining ground. Investors are now bracing for the upcoming release of labor market and inflation data, which could provide more clarity on economic health after a recent government shutdown disrupted official data flow.

(With inputs from agencies.)