U.S. stocks closed lower as investors moved out of technology shares and rotated into areas of the market tied more closely to broader economic growth.
“The S&P 500 pulled back as investors dumped technology stocks and moved into shares more broadly linked to improvements in the economy.” The benchmark index “fell 0.84% and closed at 6,917.81.”
The Dow Jones Industrial Average “dipped 166.67 points, or 0.34%, to end at 49,240.99.” Earlier in the session, the Dow “rose as much as 0.5% to touch 49,653.13, a new record.”
The Nasdaq Composite saw steeper losses, “shedding 1.43%, settling at 23,255.19.”
Technology Stocks Lead the Decline
“Most tech shares were in the red,” including several members of the so-called “Magnificent Seven.” Microsoft and Meta Platforms “were both down more than 2%,” while Apple “was marginally lower.”
Nvidia also declined sharply, with the artificial intelligence leader’s “nearly 3% drop adding to its losses for the year.”
Software stocks continued to struggle. “Shares of ServiceNow and Salesforce fell close to 7% each,” extending what the article described as their “2026 tumble.”
Market Sentiment Shifts Away From Risk
Josh Brown, CEO of Ritholtz Wealth Management, described the sell-off as a recurring market pattern.
“I think we have one or two of these periods every year,” Brown said on CNBC’s Halftime Report. “The cause is always different, but the effect is always the same. Some of the most popular trades of the previous uptrend just get absolutely nuked.”
Brown pointed to Palantir Technologies, which “gave up some of its morning gains,” adding that the action “tells you risk appetite is coming out of anything that has to do with technology.”
Palantir Surges on Earnings, Then Pulls Back
Shares of Palantir “jumped almost 7% after the defense tech company gave strong fourth-quarter financial results and upbeat guidance.”
At one point, the stock “was trading 11% higher in Tuesday’s premarket session,” before retreating alongside broader tech weakness.
Crypto Markets Also Under Pressure
Pressure extended beyond equities. “In cryptocurrencies, for instance, bitcoin fell and touched its lowest level since November 2024.”
The move followed bitcoin dropping “below the $80,000 level for the first time since last April over the weekend.”
Consumer and Financial Stocks Show Strength
Despite the broader decline, “there were a few bright spots in markets.”
Walmart “gained about 3% and surpassed a $1 trillion market capitalization threshold” after a sharp rally “driven by its digital businesses growth and acquisition of new customers.”
PepsiCo “advanced almost 5% after the company reported strong earnings, fueled by improving organic sales across its business.”
Bank stocks also performed better, with “shares of JPMorgan and Citigroup in the green.”
AI Concerns Weigh on Software Sector
Bill Northey, senior investment director at U.S. Bank Asset Management Group, said revenue trends remain strong but warned about risks in certain areas.
“Revenue trends look incredibly solid, but at the margin, there continues to be some concerns emanating around the software space,” Northey told CNBC, citing “the potential disintermediation that can occur from artificial intelligence.”
“I think that’s a story that is still yet to be written, but ultimately, we’re seeing that reflected in sentiment at this point in time,” he added.
Precious Metals Rebound After Recent Losses
A recovery in metals prices helped stabilize sentiment. “Spot gold was up 6% and spot silver was up 7% on the day.”
Gold and silver “have been the most popular trades of retail traders this year,” following heavy losses last week that “raised fears that the trade unraveling would trigger a risk-off mentality for the group across the board.”
Earnings Season Remains in Focus
Investors are monitoring a heavy earnings calendar, with “more than 100 S&P 500 companies reporting earnings results this week.”
In addition to Alphabet, “fellow ‘Magnificent Seven’ giant Amazon is slated to report later this week.
