US AI stock sell-off shakes markets from Wall Street to Asia

A major sell-off in technology stocks shook global markets on Tuesday.

Investors have started to question whether the high valuations of AI companies are justified.

The tech-heavy Nasdaq index opened two percent lower, and the Dow and S&P 500 also fell at opening.

All three major US stock indices had hit record highs earlier this year because of strong interest in AI technology.

Some economists have warned that the rush of spending on AI infrastructure could be a bubble.

They compare the current situation to the dot-com bubble that burst in the early 2000s.

Seven technology companies now make up thirty percent of the S&P 500's total value.

This heavy reliance on a single industry has made some investors nervous about the future.

The sell-off was triggered by several events on Monday.

Alphabet, the parent company of Google, had its worst day on the market in over a year.

Two well-known AI researchers left the company last week, which worried investors.

Alphabet's share price dropped five percent by the end of Monday.

One market analyst said that investors are becoming more careful about AI stock valuations after months of excitement.

Concerns have also been heightened by signals from the Federal Reserve.

The central bank suggested last week that it may raise interest rates to fight rising inflation.

Higher interest rates increase the cost of borrowing, which could slow down investment in AI infrastructure.

A financial advisor noted that when borrowing becomes more expensive, companies often reduce their spending on new technology projects.