AI Stocks Drag Down Wall Street

More drops for AI stocks dragged the US market lower on Wednesday, pulling Wall Street to its fourth straight loss and its worst in nearly a month.

• The S&P 500 fell 78.83 points, or 1.2%, to 6,721.43.
• The Dow Jones Industrial Average dipped 228.29 points, or 0.5%, to 47,885.97.
• The Nasdaq composite dropped 418.14 points, or 1.8%, to 22,693.32.

The majority of stocks within the S&P 500 rose, including oil producers that benefited from a jump in crude prices following President Trump's latest escalation against Venezuela, the AP reports. But continued drops for stocks in the artificial-intelligence industry drowned out such gains.

Questions continue to dog the former AI superstars about whether their yearslong dominance of Wall Street meant their prices shot too high, as well as whether all the investment in AI will produce enough profit and productivity to prove worth the cost. Worries are also rising about the debt that some companies are taking on to pay for it all. Broadcom dropped 4.5%, Oracle fell 5.4% and CoreWeave sank 7.1%. Nvidia, the chip company that's become Wall Street's most influential stock because of its tremendous size, fell 3.8% and was the heaviest weight on the S&P 500.

Power companies that jumped earlier in the year on expectations for stronger demand from electricity-sucking data centers also lost some of their shine. Constellation Energy fell 6.7%. Also on the losing end of Wall Street was Lennar, which sank 4.5% following a mixed profit report. The homebuilder delivered a weaker profit for the latest quarter than analysts expected, though its revenue topped expectations. Executive Chairman Stuart Miller said that conditions remain challenging, with customers feeling less confident while looking for discounts and more affordable options. Progressive, meanwhile, fell 2% after the insurer said that its net income for November fell 5% from its year-ago level.

• On the winning side of Wall Street were oil companies, after Trump ordered a blockade of all "sanctioned oil tankers" into Venezuela. That sent the price of a barrel of benchmark US crude higher by 1.2% to $55.94. just a day after it sank to its lowest level since 2021. Brent crude, the international standard, climbed 1.3% to $59.68 per barrel. That in turn helped ConocoPhillips rise 4.6% and cut into its loss for the year so far, which came into the day at 8.5%. Devon Energy rallied 5.3% and Exxon Mobil climbed 2.4%.
• Netflix added 0.2% after Warner Bros. Discovery's board said it still recommends shareholders approve a buyout offer from the streaming giant for its Warner Bros. business, rather than a competing hostile bid from Paramount Skydance for the entire company. Warner Bros. Discovery fell 2.4%, while Paramount Skydance dropped 5.4%.