Analysts working at Nasdaq.
Adam Jeffrey | CNBC
the Standard & Poor's 500 And Nasdaq Composite High-priced technology stocks fell Wednesday as they continued to exit the market.
The S&P 500 fell 1.2%, while the technology-heavy Nasdaq fell 2.5%. Dow Jones Industrial Average It added 127 points, or 0.3%, supported by gains of more than 3% in United Health Following Wall Street's upgrade on the back of its strong earnings report.
Meta It decreased by about 4%, while apple, Netflix And Microsoft All fell more than 1%. It was the latest sign that investors are pulling back from big-cap technology after the group’s strong performance this year as artificial intelligence has captured the market’s attention.
Semiconductor stocks, especially in the technology sector, struggled after a Bloomberg News report that the Biden administration is considering tougher trade restrictions if companies continue to give China access to U.S.-made technology.
the Van Eck Semiconductor ETF (SMH) It fell about 5% after the report. Nvidia and stocks listed in the United States Taiwan Semiconductor They lost about 5.5% and 2% respectively.
the Russell 2000 The Nasdaq fell 0.5%, putting its five-day winning streak in jeopardy. Still, the index, which focuses on small-cap companies, has gained about 11% over the past five days as the market’s rally broadened. Meanwhile, the Nasdaq has lost more than 1% in the same period as investors booked profits from technology names that have seen huge returns this year.
The rotation comes as traders have become more optimistic about interest rate cuts, which would benefit small-cap companies and companies with higher financing costs. Fed funds futures are now signaling a 100% chance the Fed will cut rates in September, according to the CME FedWatch tool.
“People are literally selling some of the large caps, taking some profits, and buying some of the more cyclical companies,” said Mike Dixon, head of quantitative research and strategy at Horizon Investments. “I wouldn’t be surprised if this continues into earnings.”
