Markets had a shaky day on Tuesday. Stocks fell, and bitcoin dropped to its lowest level since November 2024.
The Dow Jones closed down 167 points, or 0.34%. At one point during the day, it had fallen by as much as 575 points. The S&P 500 lost 0.84%, while the Nasdaq fell 1.43%. Technology and software stocks led the decline, making it the worst day in two weeks for the S&P and Nasdaq.
Bitcoin also struggled. It dropped nearly 7% earlier in the day, falling below $73,000. That is its lowest level since Donald Trump won the presidential election. Later, it recovered slightly and traded around $76,800.
Bitcoin is now down about 40% from its record high of over $126,000 in October. The Trump administration has supported crypto and promised to make the US the “crypto capital of the world.” Even with that support, bitcoin has been unstable and unable to return to its earlier highs.
Silver rose 10% to around $85 per ounce. Many investors see gold as a safer option during uncertain times. Over the past five years, gold has performed better than bitcoin.
AI Concerns Weigh on Tech Stocks
Technology stocks were under pressure partly because of new developments in artificial intelligence.
AI company Anthropic announced new features for its Claude chatbot. The tool can now assist with legal tasks. This raised concerns that AI could replace or disrupt some software companies that serve the legal industry.
Salesforce shares dropped nearly 7%. Other major tech companies also fell. Microsoft declined 2.87%, Amazon fell 1.79%, and Nvidia dropped 2.84%.
Investors are also questioning whether the AI boom will bring enough profit to justify the huge spending. Last week, Microsoft shares fell sharply after reporting slower-than-expected cloud growth and higher AI expenses.
The Nasdaq, which hit a record high in October, is now down more than 3% from that peak. The Dow is less than 1% below its recent record high in January.
Not all stocks were down. Walmart shares rose almost 3%, pushing the company’s market value above $1 trillion for the first time.
Geopolitical Tensions Add to Market Stress
Markets became more volatile after reports that the United States shot down an Iranian drone approaching a US aircraft carrier. The news increased fears of rising tensions between the US and Iran.
The VIX, often called Wall Street’s “fear gauge,” rose 10% after earlier jumping as much as 25%. A higher VIX level usually means investors expect more market swings.
Oil prices also climbed. Brent crude rose 1.6% to $67.33 per barrel. West Texas Intermediate increased 1.7% to $63.21 per barrel.
The US dollar slipped slightly after gaining strength in the previous two days.
Overall, investors are showing caution. With concerns about AI profits, global tensions, and market uncertainty, many are moving toward safer assets and reducing risk.
