US Stocks Retreat from Record Highs Amid AI Valuation Concerns

New York | EcoPulse24

US stocks ended lower on Monday, retreating from the record highs reached last Friday as renewed concerns about the overvaluation of artificial intelligence companies prompted investors to scale back positions in heavyweight tech shares.

The S&P 500 closed down 0.2%, the Nasdaq 100 lost 0.3%, and the Dow Jones Industrial Average declined about 0.4%, with sector performance mixed across the market.

Technology stocks led the losses. Nvidia fell 1.2%, while Tesla dropped sharply by 3.3%, amid ongoing market debate over whether the significant capital expenditures in AI technologies by software firms and data centers will deliver the promised returns. Oracle and Palantir also underperformed, down 1.3% and 2.4% respectively.

In basic materials, volatility persisted as Freeport-McMoRan came under selling pressure following declines in silver and copper prices from their recent record highs, negatively impacting mining stocks overall.

Conversely, energy stocks outperformed the broader market, buoyed by oil prices rising more than 2% after the US tightened sanctions on Venezuelan oil tankers. Exxon Mobil shares rose 1.2%, while Chevron climbed about 0.7%.

This performance signals a notable shift in investor risk appetite, with focus moving from chasing record highs to reassessing profitability fundamentals, particularly in the AI sector. Energy prices and geopolitical factors are expected to remain key influences on market trends in the near term.