Mystery NASDAQ selloff adds tension into a make-or-break week for the AI trade

Another sell-off for high-flying artificial-intelligence stocks is dragging Wall Street sharply lower on Tuesday. The S&P 500 dropped 1.7% after careening between an early gain of 1% and a loss of 2.3%, sinking further from its all-time high set a week ago. The Nasdaq composite was 2.9% lower, and the Dow Jones Industrial Average was down 408 points, or 0.8%, as of 1 p.m. Eastern time. Indexes swung lower as companies selling computer chips, memory and other building blocks of the AI boom broke from early gains to losses. Micron Technology went from a jump of 4.2% to a drop of 7.6%, for example. That’s a day after it soared 9.9% and two days after it plunged 13.3%. The computer memory company’s stock has already tripled so far this year, raising criticism that it’s gone too far, too fast. Following last week’s industrywide sell-off, the question is whether AI stocks broadly are heading for a long downturn or just needed a shake-out to get rid of excessive optimism. Marvell Technology dropped 13.3%, and Advanced Micro Devices sank 8.7% after both AI winners also erased early-morning gains. Nvidia’s fall of 3.1% was one of the heaviest weights on the S&P 500 because the chip company is Wall Street’s largest company by value and thus its most influential. All the while, several big-name AI companies are racing to list their stocks on a U.S. exchange and sell them at high prices. OpenAI, the maker of ChatGPT, said Monday it was the latest to file confidential paperwork with U.S. regulators for an initial public offering. SpaceX’s IPO could happen later this week. The weakness for AI stocks drowned out the benefit Wall Street got from easing oil prices. More stocks in the S&P 500 actually rose than fell, despite the sharp drop for the overall index, as the price for a barrel of Brent crude oil sank 2.7% to $91.66. Oil prices have swung as hopes rise and fade that the United States and Iran can reach a deal to reopen the Strait of Hormuz. A reopeni