Stock market today: Dow, S&P 500, Nasdaq turn higher in volatile trading as Wall Street assesses AI fears

February 18, 2026 - 00:00

Major stock indices staged a dramatic turnaround during a turbulent trading session on Tuesday, ultimately closing higher as investors grappled with growing anxieties surrounding the artificial intelligence sector. The initial sell-off, which hit technology stocks particularly hard, broadened to impact a diverse array of industries, signaling a market-wide reassessment of AI's near-term prospects and valuations.

This volatility underscores a pivotal moment where the initial, unbridled enthusiasm for AI is being tempered by practical considerations. Investors are now scrutinizing which companies possess sustainable business models and clear paths to profitability in the AI space, leading to significant sector rotation. The fear is that an AI-driven bubble, having propelled the market to record highs, may be showing early signs of deflation.

Despite these headwinds, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all managed to claw their way into positive territory by the closing bell. This resilience suggests that while the market is sobering up to AI risks, underlying economic strength and earnings from other sectors are providing crucial support. Analysts note that this period of consolidation could ultimately create healthier foundations for future growth, separating speculative bets from genuine innovators. The trading day served as a stark reminder that the integration of AI into the global economy will be a complex journey marked by both breakthroughs and setbacks.