AI displacement trade rocks stocks again as Wall Street searches for next sector to price downward

U.S. stocks fell sharply Thursday as the market punished companies seen as potential losers from artificial-intelligence technology.

The S&P 500 sank 1.6% for its second-worst day since Thanksgiving, though it’s still near its all-time high set late last month. The Dow Jones Industrial Average dropped 669 points, or 1.3%, and the Nasdaq composite fell 2%.

AppLovin lost nearly a fifth of its value and tumbled 19.7%, even though it reported a stronger profit for the latest quarter than analysts expected.