Another sell-off for AI stocks knocks Wall Street back to where it was 5
weeks ago
[June 11, 2026] By
STAN CHOE
NEW YORK (AP) — Another sell-off for artificial-intelligence stocks
helped drag the U.S. market sharply lower Wednesday, as Wall Street’s
former superstars continue to face heavy scrutiny for their success.
The S&P 500 dropped 1.6% for its first back-to-back drop in three weeks
and is back to where it was in early May. The Dow Jones Industrial
Average tumbled 953 points, or 1.9%, and the Nasdaq composite led the
market lower with a 2% slide.
Wall Street has been shaky since last week, when AI stocks went from
roaring to records to suddenly turning lower. Among the worries is that
their prices have simply shot too high, too fast because of AI mania.
The question now is whether the break lower has cleared out excessive
optimism that may have built into their stock prices, or if it’s the
start of a longer downturn.
Super Micro Computer, which sells AI servers, tumbled 28% after saying
late Tuesday that it plans to raise $7 billion in cash by selling shares
of stock and convertible preferred stock. Such moves raise the most
money for companies when their stock prices are high, and they can
dilute the ownership stakes of existing shareholders.
Micron Technology swung from an early loss of nearly 4% to a modest gain
and back to a loss of 4.7%. It’s coming off a wild stretch where it sank
7.7% last Thursday, then plunged another 13.3% Friday and rallied 9.9%
Monday. Despite all the swings, the computer memory maker’s stock is
still up 212.5% for the year so far.
Nvidia, the chip company that’s grown into a nearly $4.9 trillion
behemoth because of the AI boom, was the heaviest weight on the S&P 500
after falling 3.7%. The second-heaviest was another AI winner, Broadcom,
which fell 5.1%.
Some of the pressure on AI stocks could also be coming from investors
pulling cash out to prepare for high-profile debuts on the U.S. stock
market for several AI giants. SpaceX’s initial public offering could
come later this week, for example.
Weakening stocks for companies with big fuel bills also pulled the
market lower. United Airlines sank 6.2%, and cruise-operator Carnival
fell 6.3% after oil prices rose due to the latest fighting in the war
with Iran.
The price for a barrel of Brent crude oil rose 1.8% to $93.10 after
President Donald Trump warned Iran would “pay the price” for stalled
negotiations between the two on their war. The war has been keeping the
Strait of Hormuz effectively shut to oil tankers, which has prevented
the delivery of crude from the Persian Gulf to customers worldwide.
High oil prices have sent inflation higher, and a report on Wednesday
showed that prices for U.S. consumers jumped in May at the highest speed
in three years.
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Options traders Steven Rodriguez, left, and Marty Handler work on
the floor of the New York Stock Exchange, Wednesday, June 3, 2026.
(AP Photo/Richard Drew)
 But Treasury yields nonetheless held
relatively steady in the bond market because the figures were pretty
much exactly what economists had forecast. The rise in an important
underlying measure of inflation, meanwhile, was not as bad from
April through May as economists expected.
The yield on the 10-year Treasury edged up to 4.54% from 4.53% late
Tuesday. The two-year Treasury yield, which more closely tracks
expectations for what the Federal Reserve will do with its overnight
interest rates, held at 4.13%.
Traders have been building bets recently that the Fed will have to
hike its main interest rate at least once this year, given how high
inflation is and how strong the U.S. job market remains. Wednesday’s
inflation update didn’t sway them much, according to data from CME
Group.
High yields can slow entire economies and undercut prices for all
kinds of investments, including stocks and cryptocurrencies. They
hit investments seen as the most expensive in particular, and some
critics are calling AI a bubble where investment inflated too far.
All told, the S&P 500 fell 119.66 points to 7,266.99. The Dow Jones
Industrial Average dropped 953.33 to 49,918.78, and the Nasdaq
composite sank 509.32 to 25,169.50.
In stock markets abroad, indexes in Europe were mixed following
sharper drops in Asia.
South Korea’s Kospi tumbled 4.5%, hurt by losses for tech giants
Samsung Electronics and SK Hynix.
Tokyo’s Nikkei 225 sank 1.9% after data showed Japan’s producer
price index, a measure for prices at the wholesale level, rose in
May at the fastest pace in more than three years. Shares of
technology and telecommunications giant SoftBank Group, which has a
strong AI focus, lost 8.3%.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this
report.
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