AI pioneer Nvidia was again the heaviest weight on the market. The chipmaker's drop of 3.2% brought its loss for the month to nearly 11%, putting it in "correction" territory, or when a stock falls at least 10% from its previous high. The company is scheduled to report is third-quarter financial results on Wednesday.

Investors' initial euphoria gave way to selling as hopes for a December rate cut faded and bitcoin continued to sell off.

The swift expansion of expensive AI infrastructure and the high capital demands for generative AI, in comparison to earlier cloud technologies, have left

"Past innovation-driven booms—like the 1920s and in the 1990s—have led the market to overpay for future profits even though the underlying innovations were real."

Nvidia falls 3%, jobs report adds to concern that Fed won't cut rates in December

Stocks appeared to get a boost after an influential official at the Fed suggested he may support cutting interest rates again.

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Healthcare stocks have outperformed the broader market by nearly 10 percentage points this month as AI bubble concerns have weighed on tech stocks.

Palantir stock has shot up by a remarkable 126% year to date as of this writing, while BigBear.ai has delivered gains of 25% despite bouts of volatility. However, both generative AI software companies are facing a few headwinds.

At first, it seemed like traders finally got the clear response they had been eagerly awaiting: Nvidia reported super-strong earnings Wednesday evening, initially easing fears that demand for AI had faded.