S&P 500: How are AI and energy shocks weighing on equities? – Deutsche Bank

Risk aversion swept through US equities as AI-related stocks and higher Oil prices weighed on sentiment, according to Deutsche Bank’s Early Morning Reid. The S&P 500 and NASDAQ suffered their steepest falls in months, with semiconductor and AI-exposed shares coming under heavy selling pressure even as defensive sectors outperformed. Against a backdrop of declining US yields, a gain in the equal-weighted S&P 500 underscored a rotation out of mega-cap growth stocks.

How are AI concerns weighing on US stocks?

"As all that was happening, yesterday also brought a fresh wave of concern around AI-driven growth, reversing some of the optimism from earlier in the week. So it was a rough session for several of the most affected names, and the Philly semiconductor index (-6.72%) had its worst day since June, whilst CoreWeave’s share price (-10.06%) fell to its lowest since May 2025."

"Put together, this all helped drive the broader indices lower, with the S&P 500 (-1.21%) posting its worst daily performance since July, whilst the NASDAQ (-2.60%) had its biggest decline since June."

"However, note that the main defensive sectors rallied strongly, with consumer staples (+3.11%) and utilities (+1.98%) leading the way as two thirds of S&P 500 constituents moved higher, helped by the fall in yields."

"This also marked the biggest outperformance of the equal-weighted S&P 500 (+0.77%) over the market cap index since July 2024."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)