US stocks slip at open: Dow crashes 400 points, S&P falls 1%

US equities fell sharply on Tuesday as investors retreated from major technology names, and sentiment across risk assets deteriorated further.

The Dow Jones Industrial Average declined 466 points, or 1%, while the S&P 500 shed 1%, putting it on course for a fourth straight day of losses — its longest downturn since August.

The Nasdaq Composite dropped 1.5%, extending the month’s weakness in technology and artificial intelligence-linked shares.

The renewed pressure reflects mounting concern that valuations across the sector have become stretched after a year-long rally powered by enthusiasm for generative AI.

Risk sentiment deteriorated further as Bitcoin briefly fell under $90,000, continuing its slide from the $126,000 record reached in early October. The token was last trading just above $91,000.

With many technology investors holding significant crypto exposure, the move raised concerns that further declines could spill over into equities.

Nvidia, Amazon, and Microsoft are under pressure

Nvidia fell 2%, adding to its recent slide. The chipmaker is down 10% this month heading into its third-quarter earnings report, due after Wednesday’s close.

Nvidia’s performance has become a focal point for the market, with investors trying to determine whether the AI hardware boom can justify the sector’s rapid appreciation.

Other members of the so-called “Magnificent Seven,” including Amazon and Microsoft, also came under pressure.

Concerns around whether heavy debt-funded investment in AI infrastructure can deliver sustainable returns have contributed to the selloff.

Private credit names tied to AI expansion are also under scrutiny. Blue Owl, a major lender to data centre projects, extended its decline after falling 6% in the prior session.

Earlier this month, the firm said it would merge two private credit funds, with investors in the private vehicle facing losses and restrictions on redemptions until next year.

Adding to caution, Alphabet CEO Sundar Pichai told the BBC that parts of the current AI boom exhibit “irrationality” and warned that no company “is going to be immune” if the bubble bursts.

Weakness spreads beyond tech

The downturn extended beyond technology. Home Depot shares declined after the retailer missed earnings expectations and cut its full-year outlook, adding another point of concern for markets that were already on edge.

Tuesday’s losses followed a negative session on Monday, when all three major indexes closed in the red. The Dow fell more than 550 points, while the S&P 500 and Nasdaq each slipped nearly 0.9%.

The Nasdaq is now on pace to end its seven-month winning streak, while the S&P 500 is down 2.5% in November after six straight months of gains.

Investor anxiety has also been fueled by diminishing expectations for a December Federal Reserve rate cut.

Fed funds futures now imply roughly a 50% chance of a cut, down sharply from more than 90% a month ago.

With equity valuations elevated, investors are increasingly relying on central bank support to underpin the market.

The week’s upcoming data — including the Fed’s October meeting minutes and the delayed September nonfarm payrolls report — is expected to shape expectations for monetary policy heading into year-end.