US Stock Market Faces Volatility Amid AI Sector Uncertainty and Sector Rotation

The US stock market experienced notable volatility in early 2026, with the Dow Jones, S&P 500, and Nasdaq posting their worst month in nearly a year. AI-related stocks, particularly Nvidia, faced declines despite strong earnings, raising investor concerns about the returns on large data center investments. While tech stocks cooled, capital shifted toward sectors like energy, industrials, and consumer staples. Market strategists highlight ongoing uncertainty about AI's disruptive impact and its winners and losers, contributing to cautious investor sentiment.