A challenging week for technology stocks could indicate a decrease in investor trust regarding artificial intelligence.

According to the Wall Street Journal, the Nasdaq Composite Index experienced a 3% drop — marking its most difficult week since President Donald Trump revealed his extensive tariff strategy in April.

Tech firms that have seen strong performance throughout the year faced significant setbacks, with Palantir’s share price plunging 11% this week, Oracle falling by 9%, and Nvidia experiencing a 7% decline. These losses followed earnings reports from Meta and Microsoft, which suggested they would be maintaining substantial investments in AI (both firms saw a decrease of approximately 4%). 

“Valuations are high,” stated Cresset Capital’s Jack Ablin to the WSJ. “Even minor negative news is amplified … while positive news isn’t sufficient to create movement because expectations have already been elevated.”

Factors like the persistent government shutdown, decreasing consumer confidence, and extensive layoffs are likely contributing to the downturn in the stock market. However, the less tech-focused S&P 500 and Dow Jones Industrial Average fared better, with declines of 1.6% and 1.2%, respectively.