AI Stocks Rally Fails, Signaling Deeper Selloff Risk

Tuesday's market action dealt a blow to hopes that last Friday's sharp selloff in AI stocks was a one-off. The early session attempted a "Turnaround Tuesday" narrative, but the rally quickly lost momentum as buying interest evaporated.

Monday's bounce is now widely viewed as a classic dead-cat bounce—a short-lived recovery within a broader downtrend. With the failed follow-through, traders are bracing for renewed pressure on the AI sector, which has been a key driver of equity gains this year.