Tech Stocks Decline Amid AI Valuation Concerns, Market Correction

Technology stocks, particularly those linked to the AI sector, experienced a notable pullback as investors responded to skepticism about AI's immediate profitability, highlighted by a recent MIT report revealing that 95% of generative AI projects failed to deliver measurable business returns. This has triggered a market correction and increased volatility, with stocks like Palantir Technologies facing sharp declines amid broader concerns. Despite the sell-off, some analysts view the current market behavior as orderly profit-taking and anticipate another significant rally, potentially spurred by Federal Reserve rate cuts. The Fed's upcoming July meeting minutes and broader economic signals remain key focal points for investors. Meanwhile, industrial sectors are feeling inflationary pressures, partly due to tariffs, contributing to market sensitivity. Political tensions surfaced as President Trump called for the resignation of Fed Governor Lisa Cook, adding to the complex backdrop against which these market movements are unfolding.