The S&P 500 (. SPX), opens new tab and Nasdaq Composite (. IXIC), opens new tab on Tuesday suffered their biggest one-day drops in nearly a month, weighed down by a sharp tech decline. On Wednesday, the indexes made some gains, but the tech group lost a little more.
Investors stated that because AI prospects are so important, the sector's heavy weighting in major indexes exposes broader markets to negative developments. Walter Todd, chief investment officer at Greenwood Capital in South Carolina, stated, "A significant percentage of the S&P is tied to one single sector and one single theme." "If there is some hiccup around (AI) ... anything like that is a risk to the individual names, but also the market overall."