Wall Street’s rally wavers as skepticism about AI-driven spending grows

U.S. stocks slipped from recent records as investors reassessed whether massive artificial-intelligence bets will deliver near-term returns. The S&P 500 is down about 1% from last week’s peak and the Nasdaq more than 3%, pressured by signs of slowing revenue growth at AI heavyweight Anthropic and worries that Chinese memory-chip makers could flood the market. Stress is showing up in credit, with investors selling bonds tied to data-center projects amid doubts that AI revenues will cover heavy borrowing. Strategist Ed Yardeni cut his year-end S&P 500 target to 7,900, citing cooling enthusiasm for the AI trade and persistent inflation and rate concerns. With nearly half of this year’s U.S. growth tied to tech-related outlays, any sustained retreat in AI spending or tech shares could threaten consumer resilience and the broader expansion, even as bank executives point to ongoing support from jobs and wages.

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