A renewed sell-off in several major US technology companies pressured the stock market, with persistent anxieties surrounding the prospects of artificial intelligence continuing to impact the sector and dozens of companies across other industries in recent sessions.

At 9:52 AM New York time, the S&P 500 was down 0.5%, while the Nasdaq 100 index fell 0.9%. The Dow Jones Industrial Average was largely unchanged. Losses intensified as the S&P 500 dropped below its 100-day moving average, a key technical level. The Nasdaq Composite Index declined 1% on Tuesday, following its longest weekly losing streak since 2022.

Within the group of major technology stocks, all members declined except for Apple. Lower trading volumes following the Presidents' Day holiday potentially amplified Tuesday's market swings. An index tracking chipmakers, including NVIDIA and Broadcom, fell 2.1%. Simultaneously, a closely watched ETF that tracks software companies dropped 2.4%.

Investors in US equities are grappling with two conflicting concerns: uncertainty over whether giants like Amazon.com and Alphabet will see returns on their substantial investments, alongside worries about the disruptive impact of AI on industries beyond the technology sector.

Corporate earnings growth has been robust this quarter; however, transcripts from earnings calls show that mentions of "AI disruption" by management have nearly doubled compared to the previous quarter. Although the technology has not yet significantly dampened profit expectations, investors are not waiting passively and are instead selling shares of companies perceived to be at risk.

Chris Larkin of E*Trade from Morgan Stanley noted that last week's employment and inflation data were overshadowed by the influence of "AI disruption" and the ongoing rotation away from tech stocks. He suggested that unless this week's economic data delivers a significant surprise, a similar scenario could play out again.

"The market remains near historic highs, but it might not feel that way for some investors because sharp declines seem to almost always interrupt rallies just as they begin," Larkin said. "If this theme persists, the market's path could be bumpy, even if the overall trend remains upward."

Nevertheless, Larkin also pointed out that pullbacks in specific sectors and individual stocks might present opportunities—areas where AI could be a potential headwind but equally a tailwind.