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U.S. stocks tumble as government shutdown and AI doubts rattle investors

A perfect storm of political gridlock and tech sector skepticism sends markets reeling. Will this week’s losses signal a deeper correction—or a buying opportunity?

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In this image we can see the information board, buildings, shed, trees, electric cables and sky...
In this image we can see the information board, buildings, shed, trees, electric cables and sky with clouds.

U.S. stocks tumble as government shutdown and AI doubts rattle investors

U.S. stock markets ended the week on a downbeat note, with the S&P 500 and Dow Jones Index both posting losses. The ongoing U.S. government shutdown and waning enthusiasm for AI-driven tech stocks contributed to the decline.

The S&P 500 shed 1.7% over the past week, while the Dow Jones slipped by 1.2%. The Nasdaq Composite also fell, dropping 3%—its steepest decline since April. Experts advise investors to watch for pullbacks in the Nasdaq 100 and use them as opportunities to buy in, as the index remains attractive long-term despite short-term volatility.

Losses were particularly pronounced in technology stocks, many of which had previously surged on optimism about artificial intelligence. However, that enthusiasm appears to be waning, with investors questioning whether massive AI investments truly justify current valuations. The lack of profitability in many AI projects has become a significant concern for investors.

The U.S. government shutdown, now over a month long, and the tech sector's struggles have put pressure on markets. Chinese markets are expected to face further pressure on Monday. Meanwhile, Senate Majority Leader Chuck Schumer's proposal to end the shutdown was rejected by Republicans, and a decline in consumer sentiment reported by the University of Michigan added to market jitters.

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