There was no panic, just exhaustion. Traders rotated out of high beta into anything that didn’t move — like cash. It was an unwind of valuation faith, not earnings fundamentals. By the end of the New York session, the Nasdaq 100 sell-off had deepened, closing down about 2% as AI valuation worries finally broke through the surface. Palantir’s post-earnings drop dragged the broader complex lower, and the S&P followed in sympathy. There wasn’t a single smoking gun — just a confluence of bearish factors weighing on a market that had been looking stranger by the day. Hyper-momentum names were suddenly out of favour, crypto was unravelling, and the Fed’s latest bout of hawkish chatter added to the unease.The day started as a routine pullback and ended as something more symbolic — a collective sobering-up across everything that had flown too high. Palantir, a poster child of the AI narrative, had beaten, raised, and still got sold hard. A stock that had soared more than 170% this year couldn’t find another buyer at the top. The same tone echoed through the MAG7 and the semi names, which all traded 1%–3% lower, while defensives quietly inched green. It was one of those days when momentum’s invisible hand stopped supporting the tape, and price became its own gravity.Across markets, the mood turned risk-off. Bonds and the dollar were bid, commodities were sold, and cryptos tumbled — Bitcoin slipping below $104,000 in a clean break that erased the last month’s gains. There was no panic, just exhaustion. Traders rotated out of high beta into anything that didn’t move — like cash. It was an unwind of valuation faith, not earnings fundamentals.Top CEOs were out in force, flagging the risks that valuations had climbed too far, too fast, just as traders were taking a harder look at names like Palantir. They didn’t sound panicked, but there was an unmistakable caution in their tone — a recognition that equity multiples had become stretched and that a 10–15% correction wouldn’t just be tolerable, it might even be healthy. Markets, they implied, had priced perfection into a world still full of policy risk and geopolitical noise. Those comments didn’t trigger the selloff, but they added a new layer of sobriety to a market already wrestling with gravity.