[New York Stock Market Briefing] Closed lower on AI concerns… Broadcom plunged in the 5% range

The three major U.S. stock indexes closed lower on concerns about an artificial intelligence (AI) bubble.

On the 15th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,416.56, down 41.49 points (0.09%) from the previous session. The Standard & Poor's (S&P) 500 fell 10.90 points (0.16%) to 6,816.51, and the tech-heavy Nasdaq Composite dropped 137.76 points (0.59%) to 23,057.41.

Concerns about the AI industry weighed on the market again that day. Broadcom plunged 5.59% that day. Its decline over the past three trading sessions is close to 20%.

The Philadelphia Semiconductor Index, which consists of semiconductor-related stocks, also fell 0.61%, marking three consecutive trading days of weakness. Among index components, NVIDIA was flat to slightly up, while TSMC, AMD, and Micron Technology each fell in the 1% range.

Microsoft, Amazon, and Apple each fell around 1%.

However, sectors excluding AI-related and tech stocks generally held up. By sector, technology fell 1%, and energy and communication services were weak, but the remaining sectors all rose. Health care jumped 1.27%.

Money moving out of AI-related stocks flowed into traditional industrials and blue-chip stocks, continuing a rotation.

JPMorgan Chase, Johnson & Johnson, Procter & Gamble, Merck, and Goldman Sachs each rose around 1%. Amgen rose more than 2%.

David Wagner, head of equities at Aptus Capital Advisors, said, "It seems everyone dislikes investing in AI stocks right now," adding, "but the 'Magnificent Seven' remain undervalued considering operating leverage, and I expect these core companies to continue leading the market."

Tesla rose more than 3% on optimism after news that SpaceX is seeking an initial public offering (IPO) at a market capitalization of $800 billion.

By contrast, real estate brokerage platform Zillow plunged 8% after reports that Google is preparing a business to display real estate listings in search results.

News that Kevin Hassett, chair of the White House National Economic Council (NEC), is moving away from the list of candidates for the next Federal Reserve (Fed) chair also affected investor sentiment.

According to the CME FedWatch tool, federal funds futures reflected a 75.6% probability that the benchmark interest rate will be left unchanged in January next year.

The CBOE Volatility Index (VIX) rose 0.76 points (4.83%) to 16.50 compared with the previous session.

Goh Jeong-sam, Hankyung.com reporter jsk@hankyung.com