AI Rout Triggers Sharp Drop in US Stocks as Nvidia Slumps 16%

AI rout shakes US equities

The AI rout ignited a broad sell‑off on Wall Street Tuesday, pulling the Nasdaq into a ↓ 2% slide while chip‑maker Nvidia tumbled ↓ 16%. Analysts cited the rapid price drop of Chinese AI startup DeepSeek as the catalyst, prompting investors to reassess exposure to AI‑heavy infrastructure firms.

“The market is reacting to a sudden shift in sentiment toward AI supply chains,” said a senior trader at a New York firm.

Reuters reported that other AI‑related stocks posted double‑digit losses, widening the breadth of the decline. The episode echoes volatility seen during the pandemic when tech valuations swung sharply on macro news. Investors are now weighing whether the dip represents a temporary correction or the start of a longer‑term pullback in AI‑driven growth stocks.