AI-linked stocks continue to sell-off on Wall Street as indices remain on edge ahead of jobs report

AI-linked stocks on Wall Street continued to see selling pressure to start the new trading week. Benchmark indices gave up the initial optimism to end lower ahead of a key jobs report.

The Dow Jones ended 260 points off the highs of the day and below the flat line, while the S&P 500 and Nasdaq underperformed, the latter in particular, with a 0.6% fall, led by an extended sell-off in shares of Broadcom, AMD, and other AI-linked stocks.

Oracle, not part of the Nasdaq, also fell another 3%. The fall was cushioned by the outperformance of Nvidia and Meta, where buying emerged at lower levels.

The street remains divided over the valuations of these AI stocks. RGA Investments wrote in a note that the story "has promise", but some stocks are already trading at valuations as though the results have been delivered. On the flip side, Mark Hackett from Nationwide wrote that the market is just recalibrating itself and that the current issues are company-specific, not industry-wide.

All eyes are on the all important non-farm payrolls report which will be released this evening. Projections are for the figure to be at 50,000 for the month of November, and unemployment rate to be at 4.5%.

Mike Wilson of Morgan Stanley wrote that the market is firmly back in the "good is bad, bad is good" era, stating that a weaker jobs report may spur the markets higher as hopes of further easing from the Fed would rise, and vice-versa.

Eyes are also on the peace talks for the ongoing Russia-Ukraine war, where US officials claim to have resolved substantial issues. The EU leaders, in a meeting with US President Donald Trump on Monday appeared to have welcomed the US-backed security guarantees for Ukraine, which it will receive in return for giving up its bid to become a NATO member.

Besides the non-farm payrolls, the US will also see reporting of retail sales data for October, and business inventory details this evening.