Dow drops 400 points as AI stocks resume their decline, Nasdaq falls 1.9%

U.S. stocks retreated on Thursday as names in the artificial intelligence trade came under pressure yet again amid worries around eye-watering valuations.

The Dow Jones Industrial Average slipped 455 points, or 1%. The S&P 500 traded down by 1.2%, while the Nasdaq Composite shed 1.9%.

AI stocks remained in focus for those on Wall Street during the session. Qualcomm shed 4%, even after the chipmaker posted better-than-expected quarterly results. Advanced Micro Devices, a standout name in the prior day, declined 7%, while Palantir Technologies and Oracle dipped 4% and 3%, respectively. Shares of AI darling Nvidia and fellow “Magnificent Seven” name Meta Platforms slid as well.

However, Marvell Technology was a winner, with shares moving almost 1% higher following a report that Softbank had thought about a potential takeover of the chipmaker.

Equities linked to the AI space rebounded on Wednesday from valuation concerns that swirled earlier this week, serving as a potential boon for the major indexes. AMD closed more than 2% higher in the previous session after the semiconductor company reported better-than-expected third-quarter results. The performance pulled up some other AI stocks alongside it, including Broadcom and Micron Technology. Oracle also recouped some recent losses.

While the recovery of the AI names helped the market bounce back a bit following a soft start to the weekly period, all three major U.S. indexes are still firmly in the red week to date.

“We’re still very early in the AI super-cycle,” Dynasty Financial Partners’ Shirl Penney told CNBC’s “Closing Bell” on Wednesday. “There’s going to be continued significant capex, not just with some of the ‘Mag Seven,’ but also you see it with large financial firms like Schwab, JPMorgan and others.”