Elizabeth Banks and Cocaine Bear speak onstage during the 95th Annual Academy Awards (Kevin Winter/Getty Images)

US stocks stumble to start September with another day of AI names dumped

The S&P 500 ended down 0.7%, the Nasdaq 100 gave back 0.8%, and the Russell 2000 fell 0.6%.

9/2/25 4:41PM

The global sell-off in long-term government bonds weighed on risk assets on Tuesday, accentuating the pullback in the AI trade seen in the final trading day of August. However, stocks did manage to close at session highs after facing steep losses during the morning.

The S&P 500 ended down 0.7%, the Nasdaq 100 gave back 0.8%, and the Russell 2000 fell 0.6%.

A Morgan Stanley basket of AI tech beneficiaries is down 5.5% over the past two sessions, its worst two-day drubbing since the sessions immediately following “Liberation Day” on April 2, when the extent of President Donald Trump’s reciprocal tariff regime was unveiled.

Energy and healthcare were the only two S&P 500 sector ETFs to eke out gains, while tech was unsurprisingly at the bottom of the leaderboard.

The day’s bright spots were led by Ulta, which surged 8.1% as traders piled into the stock after the beauty retailer posted strong Q2 earnings on Friday. Kraft Heinz shares led declines, sinking 7% after the ketchup maker said it planned to split into two separate companies.

Nvidia dropped 2% amid a broad pullback in the AI trade as the chip giant’s newsroom pushed back on what it called “erroneous chatter in the media.”

CoreWeave sank 9.4% as its top shareholder, along with several executives, continued to take profits now that they’re finally allowed to sell.

Lucid shares fell 10.8%, hitting an all-time low on the first day that the luxury EV maker’s 1-for-10 reverse stock split took effect.

Constellation Brands dropped 6.6% after the beer giant slashed its full-year guidance, as the Modelo and Corona parent company braces for softer sales.

Canopy Growth fell 17.5% after the cannabis company filed for a $200 million equity offering on Friday, a move that would dilute existing shares and could put downward pressure on the stock.

Paramount Skydance dipped 1.6% after the production powerhouse announced a deal with Microsoft’s Activision to create a live-action “Call of Duty” film.

PepsiCo shares jumped as much as 5.9% before closing up 1.1% after The Wall Street Journal reported that Elliott Investment Management has taken an activist position of roughly $4 billion the company.

Nio rose 3.4% even as the Chinese EV company (and Tesla rival) posted a deeper net loss and lower revenue than Wall Street expected for the second quarter.

Frontier shares flew 14.5% higher after Deutsche Bank upgraded the stock to “buy” from “hold” following Friday’s news that rival Spirit Airlines had filed for its second bankruptcy in a year.

Luke Kawa1h

Investors are itching to buy the dip in memory stocks

The intense drubbing in South Korean stocks, with the benchmark KOSPI falling nearly 20% in its first two trading days of the week following a Monday holiday, represented a serious threat to the hottest AI trade: memory stocks.

South Korea’s market is dominated by two high-bandwidth memory giants: SK Hynix and Samsung.

After Tuesday’s tumble, US investors seemingly said enough is enough: it’s a buy the dip opportunity.

US memory stocks like Micron, Sandisk, Western Digital, and Seagate Technology Holdings are posting massive gains on the day. The advance comes amid positive commentary on demand for memory chips at a Morgan Stanley conference.

Even more interestingly, the iShares MSCI South Korea ETF is up big today despite the KOSPI falling 12% overnight, its largest drop on record. The ETF’s outperformance of the South Korean equity gauge is the largest since 2008, as the financial crisis raged.

The daily performance of these two can differ materially since they trade at different times, and don’t track precisely the same things. US investors are making the bet that a potential break in this momentum trade and the potential for an unwind of retail leverage in South Korean markets be damned, big drops in memory stocks are meant to be bought.

Matt Phillips2h

AST SpaceMobile surges on earnings, momentum bounce

Satellite-services-from-space play AST SpaceMobile surged Wednesday after receiving price-target hikes from analysts at Deutsche Bank and UBS amid a broader bounce in retail trading.

Shortly after 1 p.m. ET, the shares were on track for their best daily gain since late January, putting them up 30% for the week — AST reported mixed earnings after the close Monday — and more than 40% for the year.

The stock has been a favorite of smaller traders in recent years who’ve ridden AST’s 250% gain in 2024 and 244% gain in 2025. And the fact that the stock sprung back to life this week may mean that after a couple of dazed days following the outbreak of war between the US (and Israel) against Iran, retail speculators are again dip-buying once again.

That’s consistent with signals coming from the performance of Goldman Sachs’ themed baskets of stocks Wednesday, where some of the biggest gainers are “Meme Stocks” — which includes AST SpaceMobile — “Non-profitable Tech” and “Bitcoin Sensitive Equities.”

Matt Phillips4h

GitLab shares dive as death-of-human-coding theme strengthens

Shares of software development service GitLab tumbled Wednesday after lackluster guidance undermined an otherwise solid set of Q4 results.

The hard numbers, however, may be less important for the shares than the hardening narrative entombing the company, whose stock price is down roughly 60% over the last year, at last glance.

In short, the problem is that GitLab sells coding and software development services long used by human coders and software developers. And investors think rapid advances in AI coding, through programs like Claude Code, mean there will be far fewer flesh-and-blood programmers to use GitLab in the future.

To wit, this report from The Information notes that OpenAI is developing an alternative to Microsoft’s GitHub — not to be confused with GitLab, an independent company, though both offer similar services such as code repositories and collaborative software development tools.

For sure, it’s not clear that human coders are destined for the dustbin of history. But it does seem fairly obvious that far fewer will be needed.

As I’ve written recently, that makes the AI boom somewhat distinct from other recent tech frenzies, in which programmers were typically insulated from the job losses their work often unleashes.

GitLab Stock Tumbles Again. Why the Software Pain Isn’t Over.

For sure, it’s not clear that human coders are destined for the dustbin of history. But it does seem fairly obvious that far fewer will be needed.

As I’ve written recently, that makes the AI boom somewhat distinct from other recent tech frenzies, in which programmers were typically insulated from the job losses their work often unleashes.

Max Knoblauch5h

Ross Stores climbs after posting stronger-than-expected Q4 sales

Shares of off-price retailer Ross are up more than 6% on Wednesday morning, following the release of the company’s fourth-quarter earnings report after-hours on Tuesday.

Ross posted adjusted earnings of $2 per share in its Q4, ended January 31, beating Wall Street’s expectations of $1.90 per share. Total sales climbed 12% year over year to $6.6 billion, ahead of the $6.4 billion consensus.

CEO Jim Conroy credited some of the company’s success on growth in 18- to 34-year-old customers.

Looking ahead to the current quarter, Ross expects earnings of between $1.60 and $1.67 per share. Analysts polled by FactSet expect $1.68.

Matt Phillips5h

Palantir’s ties to Anthropic reportedly under strain amid Pentagon spat

Palantir Technologies may have to cut ties with AI lab Anthropic after Defense Secretary Pete Hegseth declared his department would restrict military contractors from using Anthropic’s technology, according to a story by The Information published Tuesday afternoon. Anthropic’s models are deeply embedded in the Palantir software packages the US government uses to analyze classified data.

Information reporters Aaron Holmes, Sri Muppidi, Rocket Drew, and Julia Hornstein wrote:

“Palantir CEO Alex Karp appeared to criticize Anthropic on Tuesday without directly naming it. Speaking at a defense tech summit hosted by Andreessen Horowitz in Washington, Karp upbraided Silicon Valley for going against the U.S. military, and warned that AI companies risked angering both liberals and conservatives.

‘If Silicon Valley believes we are going to take everyone’s white-collar jobs… and you’re going to screw the military, if you don’t think that’s going to lead to the nationalization of our technology, you’re retarded,’ Karp said. ‘That’s where this path is going.’”

Anthropic-Palantir Partnership at Risk After Pentagon Decision