Drops for Nvidia, Tesla and other former superstars are dragging Wall Street lower.
The S&P 500 was down 0.8 per cent in afternoon trading. The Dow Jones Industrial Average lost an early gain of 230 points and was down 28 points, or 0.1 per cent. The weakness for Big Tech had the Nasdaq composite heading toward a market-leading loss of 1.6 per cent.
Wall Street’s “Magnificent Seven” slumped on Wednesday.Credit: AP
The Australian sharemarket is set to retreat, with futures at 4.55am AEDT pointing to a fall of 50 points, or 0.6 per cent, at the open. The ASX added 0.7 per cent on Wednesday.
The group of dominant stocks known as the “Magnificent Seven” has been at the centre of the US stock market’s recent sell-off, which earlier this month took the S&P 500 10 per cent below its all-time high for its first “correction” since 2023. Big Tech had rocketed in earlier years amid a frenzy around artificial-intelligence technology to prices that critics called overdone, rising even more quickly than their rapidly growing profits.
Nvidia fell 5.7 per cent to bring its loss for the young year so far to 15.3 per cent. It was the single heaviest weight on the S&P 500 by far. Other AI-related stocks were also weak, including server-builder Super Micro Computer, which fell 7.3 per cent, and power companies hoping to electrify vast AI data centres.
Tesla has also been contending with additional challenges, including worries that political anger at its CEO, Elon Musk, will hurt the electric-vehicle maker’s sales. Tesla dropped 5.6 per cent to extend its loss for 2025 so far to 32.6 per cent.
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The US stock market has steadied somewhat since its drop into a correction, and the S&P 500 is back within 7 per cent of its record. But strategists along Wall Street warn the sharp swings likely aren’t over yet, with a suite of US tariffs scheduled to arrive early next month. Even if those end up less painful for the global economy than feared, all the talk about tariffs has already soured confidence among US consumers and companies.
So far, the economy and job market have appeared to remain solid despite the worsening moods, and economists are looking for signals that the hit to confidence is translating into real pain for the economy. Another report on Wednesday morning offered little clarity.
