Markets Slip as Tech Weighs on Indexes and Risk Appetite Cools

The Real Story Behind Micron’s AI Supercycle 👇

U.S. stocks edged lower Monday as a pullback in technology shares and renewed profit-taking pressured major indexes at the close, while investors weighed the durability of the AI-driven rally against softer signals from overseas growth.

The Dow Jones Industrial Average slipped 41.31 points, or 0.09%, to 48,416.7. The S&P 500 fell 10.88 points, or 0.16%, to 6,816.53, while the Nasdaq Composite declined 137.76 points, or 0.59%, to 23,054.4. Small-cap stocks underperformed, with the Russell 2000 down 0.76%.

Volatility picked up modestly. The CBOE Volatility Index rose 4.70% to 16.48, reflecting increased demand for downside protection as equities drifted lower through the afternoon.

Technology shares were a focal point, particularly as investors reassessed richly valued AI-linked names heading into year-end. Tesla remained in focus following fresh bullish commentary from Wedbush Securities, which said the company is entering “the most important chapter in Tesla’s history with an autonomous future ahead.”

Wedbush expects an accelerated rollout of Robotaxis across the U.S. in 2026 and sees volume production of Cybercabs beginning in the April–May timeframe. The firm estimates the AI and autonomous opportunity at “at least $1 trillion” for Tesla and reiterated its $600 price target.

Attention is also turning to earnings catalysts. Micron reports results after the close Wednesday, marking the final major AI-linked semiconductor checkpoint of the year. The company previously guided to roughly $12.5 billion in revenue and gross margins near 51.5%. Angelo Zino, speaking to AInvest, said Micron is “probably one of the strongest stories…across the semi-ecosystem,” emphasizing that “what really investors want to hear about is the strength of the high bandwidth memory cycle.” Investors are expected to focus on forward visibility into 2026 and 2027 demand and whether capacity remains fully committed.

Macro concerns added to the cautious tone. Fresh data out of China reinforced signs of sluggish momentum, with retail sales rising just 1.3% year over year and industrial production missing expectations. Lynn Song of ING said consumer confidence “remains the biggest constraint on growth,” while Goldman Sachs highlighted ongoing structural headwinds tied to the prolonged property downturn. For global markets, the data underscored China’s diminished role as a cyclical growth engine and its potential to act as a drag on manufacturing and trade.

Outside equities, risk appetite softened across asset classes. Bitcoin slid more than 3% to $85,834.84, while volatility climbed. Commodities were mixed, with energy prices falling and precious metals edging higher, reflecting a market balancing slower global growth concerns against lingering inflation and geopolitical uncertainty.

With economic data and central-bank signals looming later in the week, investors appeared inclined to reduce exposure at the margins, favoring a defensive posture after a year dominated by AI optimism and outsized gains in a narrow set of stocks.