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U.S. stocks fell on Thursday as companies that have benefited from artificial intelligence trade came under renewed pressure on concerns about eye-popping valuations.

of Dow Jones Industrial Average It fell by 309 points (0.7%). of S&P500 fell 0.9%, but Nasdaq Composite It fell 1.5%. of Nasdaq 100 The stock is down more than 2% from last Friday’s close, its worst weekly pace since early April. The biggest downside impacts are: Nvidia, microsoft, Palantir Technologies, broadcom and Advanced microdevices.

AI stock has had an uneven run since early November, and that continued in Thursday’s trading. Qualcomm Shares fell 3% after the chipmaker reported better-than-expected quarterly results but said it could lose future business with Apple. AMD, which was a standout on Wednesday, fell 6%, while Palantir and oracle They decreased by 6% and 2%, respectively. AI darling Nvidia and fellow ‘Magnificent Seven’ name shares meta platform It also sank.

“From a valuation standpoint, a lot of these were very expensive and priced to perfection, so you’re seeing a bit of a dichotomy in the market between companies that are outperforming and earning, and companies that are maybe outperforming on the top line but are showing a lukewarm outlook from a bottom-line and operating income perspective,” said Mike Muscio, president of FBB Capital Partners. “This is the difference between some companies’ earnings increasing by double digits and declining by double digits, with not much difference in between.”

Thursday’s pullback was further exacerbated by concerns about the state of the labor market, following a significant number of layoff announcements in October. Challenger Gray & Christmas said layoffs for the month totaled more than 153,000 jobs, nearly triple the number in September and an increase of 175% from a year earlier. This was the highest level for October in 22 years, which is shaping up to be the worst layoffs since 2009.

The data suddenly highlighted the precarious state of the U.S. economy, especially given the lack of economic reporting as a result of the ongoing U.S. government shutdown, which has now lasted more than a month and is the longest in history.

“Economic data is starting to come out bit by bit… It’s not government related and it’s not too rosy,” Muscio said, adding: “All of this is just setting up market weakness for some people.” That doesn’t necessarily mean “this is the beginning of a big slide or something,” he continued. The investment manager believes a typical year-end rebound could occur if the government reopens and data shows consumers are “not really dead” as the holiday season progresses.

Stocks related to building artificial intelligence capabilities rebounded Wednesday, pushing major indexes higher after struggling with valuation concerns earlier this week. AMD ended the day up more than 2% after the semiconductor company reported better-than-expected third-quarter results. This also sent other AI stocks higher, including Broadcom and Broadcom. micron technology. Oracle has also recouped some of its recent losses.

While the recovery in AI stocks temporarily helped the market recover, all three major U.S. indexes remain firmly in the red for the week to date. Many of these week-to-date losses came on Tuesday, when Palantir fell about 8% despite strong quarterly results and helped push the Nasdaq down 2% on the day. Tuesday’s decline contrasted with the Nasdaq’s rise on Monday. Amazon and other AI names.

Investors also had their eyes on Washington on Thursday as the Supreme Court weighed in on the pros and cons of the Trump administration’s tariff policies. Supreme Court justices’ hearing on Wednesday expressed some skepticism about the legality of the trade tax, leading many investors to expect a ruling against the Trump administration.