U.S. stock markets opened lower on Wednesday, dragged down by a sell-off in chipmakers and rising bond yields fueled by higher oil prices. Investors are questioning whether massive investments in artificial intelligence can justify current high valuations.

At 10:00 a.m. in New York, the S&P 500 was down 0.4%, the Nasdaq 100 had fallen 1.2%, and the Dow Jones Industrial Average was largely flat. The year's best-performing sector on Wall Street was once again volatile, with a key semiconductor index dropping 3.5%. An optimistic outlook from Taiwan Semiconductor Manufacturing (TSM) failed to lift global investor sentiment.

Traders are assessing whether technology stock valuations have become excessive, given the uncertainty over when trillions of dollars in spending will generate substantial returns. The four largest U.S. AI operators, including Meta Platforms Inc. and Alphabet Inc., are projected to spend over $725 billion this year alone.

Matt Maley of Miller Tabak noted that the negative market reaction to strong results from Taiwan Semiconductor Manufacturing is likely to raise concerns among investors about this crucial market-leading sector.

"The future path of chip stocks remains the most important question for the equity market," he said. "They are indeed showing some visible cracks, so a strong and sustainable rebound is needed soon; otherwise, it will send some real warning signals."

Traders also digested the latest economic data. Initial jobless claims fell last week, while June retail sales showed modest growth. The overall retail figure was dragged down by a decline in gas station receipts, which masked stronger sales growth at other outlets.

"Despite challenges, consumers are still spending, and the labor market is not showing any cracks," said Ellen Zentner of Morgan Stanley Wealth Management. "This type of data won't sway the Federal Reserve, but it highlights the ongoing resilience of the U.S. economy."