Following a blockbuster IPO earlier this month, Elon Musk’s SpaceX experienced a rude awakening. The rocket company’s shares have now been sliding for four consecutive days, wiping out nearly all the gains the public offering had initially made.
Now the broader stock market is experiencing a similar and intensifying sell-off. S&P 500 futures slid 1.6 percent on Tuesday, while Nasdaq 100 futures dropped 2.8 percent, on track to wipe out over $1 trillion in market value if the drop holds today, as NBC News reports.
Tech stocks, including Amazon, AI chipmaker Nvidia, Tesla, Alphabet, and Intel, plunged by more than three percent in pre-trading as well.
At the opening bell on Tuesday, America got a full view of the bloodbath, with SpaceX starting at a sobering $150, just below its opening price. Nvidia plunged by over three percent, while Tesla dropped by almost four. The S&P 500 opened with a 1.5 percent loss, confirming an unusual level of uncertainty.
The losses extended across international borders, suggesting enthusiasm for the years-long AI hype cycle could be hitting a wall. Analysts have been warning for quite some time now that enormously overvalued tech companies propping up entire markets are inflating an enormous bubble, which could risk the entire economy if it were to pop.
“Gravity strikes,” JPMorgan traders warned in a Tuesday note, referring to Asian indexes getting hammered, alongside US and EU futures, per NBC.
Given the sheer scale of its Wall Street debut and how much attention it’s been attracting, SpaceX’s four-day decline may have set off a broader jittery mood among investors. On Monday alone, the rocket company wiped out $400 billion in value when its shares fell almost 17 percent.
SpaceX also announced an “inaugural bond offering” to raise even more money for its highly ambitious plans to launch one million gigantic orbital data center satellites into space — which remains an entirely unproven concept.
If there’s one certainty, it’s that investors are in for a wild ride today. It’s yet another major “gut check” moment that could test their commitment to keeping the AI gravy train going.
More on AI stocks: The AI Bubble Has Become So Surreal That It’s Now Propping Up the Toilet Industry
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