Apple, Nvidia, and other megacaps drag S&P 500 lower as AI spending fears hit markets

Apple, Nvidia and other megacap stocks are dragging the S&P 500 lower as investor fears over AI spending returns, falling share prices, rising oil costs and US midterm election risks weigh on markets. The 10 largest S&P 500 stocks, including Apple, Nvidia, Amazon, Alphabet, Meta and Tesla, are underperforming the rest of the index, pressuring the broader market due to their outsized influence. Nvidia has dropped about 13% from its record high, while Tesla has fallen roughly 26%, with Amazon and Alphabet also seeing double-digit declines. Investor doubts about when AI investments will generate returns have triggered sell-offs in major tech firms, while Meta and SpaceX reported negative free cash flow and aggressive AI spending plans. RBC strategist Lori Calvasina remains cautious on tech, and HSBC has moved to the sidelines on equities, citing uncertainties from AI returns, political risks and geopolitical tensions.