Wall Street’s AI Rally Stumbles as Shoppers Pull Back

U.S. stocks dropped on Wednesday after new government data showed weaker-than-expected retail sales. The report tempered investor enthusiasm for the artificial-intelligence boom, which had recently pushed major indexes to record highs. According to the Commerce Department, consumers spent less last month than analysts had forecast. This raised fresh concerns about the strength of the U.S. economy. The dip suggests that even the excitement around AI—which has driven much of this year’s market gains—could not offset worries about slowing demand. The Dow Jones Industrial Average fell by 1.2%, while the S&P 500 and Nasdaq each lost more than 1.5%. Investors now watch for further economic signals, including upcoming jobless claims and inflation data, to gauge whether the pullback is a short-term blip or the start of a broader trend.