The S&P 500 ended lower on Tuesday, weighed down by losses in Micron Technology and other chipmakers due to mounting doubts about the sustainability of Wall Street’s AI-driven rally. Chip stocks in ‌Asia and the ⁠United States ⁠dropped after memory chip giant Samsung Electronics’ blowout earnings report failed to satisfy investors with sky-high expectations.

Micron and Sandisk both ​fell, pulling the PHLX chip index lower. Adding to worries about high-flying chipmakers, Reuters reported that Chinese startup DeepSeek ​is developing its own AI chip, a push that could reduce its dependence on Nvidia and Huawei chips.

According to preliminary data, the S&P 500 lost 34.07 points, or 0.45%, to end at 7,503.36 ​points, while the Nasdaq Composite lost 310.06 points, or 1.19%, ⁠to 25,811.10. The ‌Dow Jones Industrial Average fell 140.30 points, or 0.26%, to 52,915.61.

Tuesday’s chip ​selloff marked the ​latest bout of volatility among memory chipmakers and other AI-related stocks as ⁠investors worry that sharp gains related to the buildout of AI ​data centers may have left the shares too pricey.

“The story of today ​is the story of the last few weeks, and that’s rotation after the blistering run in the AI buildout, semis and memory. Expectations have gotten to be almost impossible to beat for these companies,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina. Another test of the appetite for chip stocks looms on Friday, when South Korean giant SK Hynix’s ‌U.S. listing starts trading on the Nasdaq. Elon Musk’s SpaceX fell in its first day of trading as part of the Nasdaq 100 index, and after a ​wave of brokerages initiated ​coverage on the stock.

The ⁠Dow ended lower after hitting an all-time high earlier in the session. Oil prices rose following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed after media reports that the firm ​had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions.
U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when it releases the minutes of its latest meeting on Wednesday, the first of his tenure.