U.S. stocks retreated on Feb. 26 as investors reassessed the artificial intelligence trade, with the S&P 500 falling 0.9% to 6,883, the Nasdaq dropping 1.6% to 22,782 and the Dow Jones Industrial Average easing 0.3% to about 49,320.
The pullback followed a two-day rally driven by AI optimism, but technology shares led declines as the Information Technology sector slid more than 2% amid questions over whether strong AI profits justify heavy capital expenditure.
Nvidia reported a 94% surge in quarterly profit and revenue above expectations, yet its shares fell nearly 5% as investors focused on sustainability and intensifying competition rather than headline growth.
The Nasdaq 100 declined 1.6% and software stocks weakened after Salesforce issued softer-than-expected 2027 revenue guidance, reinforcing concerns that enterprise AI spending may not immediately translate into durable earnings expansion.
Not all semiconductor names fell, with Broadcom rising 5.8% on a new AI chip rollout and AMD gaining 4.2% on partnership news, signalling increased selectivity among investors.
Energy stocks edged higher as Brent crude climbed to $72 during U.S.-Iran nuclear talks, while the 10-year Treasury yield dipped to 4.031% and the VIX jumped 10.65% to 19.84, reflecting elevated volatility.
Bitcoin fell below $67,000 and Ethereum slipped under $2,000 as the crypto market dropped more than 3% in tandem with equities, highlighting continued correlation with broader risk sentiment.
Despite near-term caution, Wall Street consensus still projects the S&P 500 reaching around 7,650 by the end of 2026, though tariff tensions, geopolitical risks and scrutiny of AI spending suggest the path higher may remain uneven.
At the time of reporting, Bitcoin price was $67,430.53.