The stock market marked its biggest decline in nearly a month after Wall Street shed highflying technology stocks.
The S&P 500 dropped 1.2%. The Nasdaq Composite slid 2%. Both marked their biggest daily declines since Oct. 10. The Dow Jones Industrial Average fell about 252 points, or 0.5%.
The S&P 500 fell more than 1% for just the third time since the start of August; the Nasdaq Composite fell more than 1% for the sixth time in that span.
The yield on the 2-year Treasury note was down to 3.58%. The 10-year yield was down to 4.09%.
A wave of negative headlines seemed to cascade into a broader risk-off trade. Cryptos, meme stocks, and artificial intelligence plays were among the losers. Mizuho’s Daniel O’Regan writes that such moves suggest “a broader de-risking trend that could be triggering forced selling across speculative assets.”
It began with Palantir Technologies, which topped analyst expectations but couldn’t post the kind of results to send shares even higher after closing at a record during Monday’s session. Bloomberg also reported comments from Wall Street chief executives including Morgan Stanley’s Ted Pick and Goldman Sach’s David Solomon that suggested the market could be due for a pullback.
“After seven consecutive months of gains—the longest stretch in eight years—a pullback may simply reflect natural market rotation or profit-taking,” writes Mizuho’s O’Regan.
Sevens Report Research’s Tom Essaye told Barron’s that, until today, AI stocks were masking broader market struggles this earnings season. He thinks Wall Street needs to see more than simple bottom-line earnings beats given things are not off record levels.
“And there were some definite disappointments last week, across industries,” Essaye says. “The market is priced for perfection—and I mean perfection—and there’s a little bit of a disjointed existence there, and, of course, the thing that’s making up for it is AI.”