Nasdaq falls 4.2% intraday... Cramer mentions sustainability of AI investment

The Nasdaq Composite fell as much as 4.2% intraday on the 5th, pushing the index more than 10% below last month's record high and into correction territory, while the S&P 500 dropped 2.9% and the Dow Jones Industrial Average slid 2.2% on an intraday basis. The selloff reversed much of the prior session's gains as investors rotated out of technology stocks and into defensive sectors, with healthcare, consumer staples and utilities falling less than the broader market and the Dow giving back more than half of its previous day's advance. The move matters because it marks the first correction for the tech-heavy index since its recent peak and signals growing caution around the AI trade that has driven much of this year's gains. CNBC Investing Club's Jim Cramer weighed in on the sustainability of AI investment during the session. What to watch next is whether the Nasdaq closes in correction territory and whether AI-linked semiconductor names stabilize or extend their selloff.