AI Jitters Shake Wall Street as Big Tech Readies Earnings Reports

Wall Street saw a turbulent day as investors grew anxious about AI disruptions ahead of earnings reports from Alphabet and Amazon. Stocks of major tech companies tumbled reflecting growing concerns about competitive pressure from AI innovations. The S&P 500 saw continued losses amid a mixed reaction to quarterly earnings.

Wall Street experienced a sharp downturn on Tuesday as investor concerns mounted over the impact of artificial intelligence on software makers. Anxiety rose in anticipation of earnings announcements from tech giants Alphabet and Amazon later this week. Nvidia shares fell 3.8%, Microsoft slipped 3.2%, while Alphabet and Amazon shares also dropped.

Investors are increasingly discerning about AI-related stocks, focusing on firms delivering tangible returns from significant AI investments. Anthropic's release of a legal tool for its Claude AI chatbot intensified fears of stiffer competition, weighing down technology stocks like Salesforce and Adobe by around 8%, with Intuit plummeting 11%.

In contrast, Palantir rose 7% following strong quarterly results. Meanwhile, healthcare stocks also faced pressure due to Novo Nordisk's sales decline warning. Walmart made headlines by becoming the first retailer to reach $1 trillion in market valuation. The day ended with the S&P 500, Nasdaq, and Dow Jones all recording losses.