U.S. Stocks End Lower as AI Sell-Off Weighs on Markets

The stock market closed lower on Tuesday as a broad sell-off in AI and semiconductor stocks weighed on investor sentiment amid concerns that AI-related valuations had become overstretched. Equities also faced additional pressure from rising oil prices and renewed geopolitical tensions in the Middle East.

Overall, S&P 500 fell 0.5% to 7,504, while Nasdaq dropped 1.2% to 25,819.

Chart of the Day

Here is the one-year chart of Cadence Design Systems (CDNS) as of June 2, 2026, when the stock was at $416.

Cadence Design Systems believes Agentic AI could become its next major growth driver as chip design becomes more complex and customers spend more on automation.

Last quarter, the company delivered 25% profit growth on 19% revenue growth and ended the quarter with a record $8 billion backlog, showing strong demand for its design software.

The company introduced AgentStack, a framework that connects AI agents across the entire chip design process, along with new AI super-agents for analog design, digital implementation, and verification. These tools automate work that previously required engineers, allowing customers to design more complex chips without proportionally increasing headcount.

In the earnings call, management stated physical AI is emerging as the next big wave of intelligence as AI moves into autonomous systems, drones, and robots.

CDNS is part of our Growth Portfolio.