FX.co ★ US Stocks Drop Further

The S&P 500 declined by 1.2%, while the Nasdaq 100 experienced a 2.1% drop, and the Dow decreased by approximately 0.7%. This movement stemmed from a significant reassessment of extended valuations in the technology and semiconductor sectors, prompting a broad market rotation. The selloff predominantly affected companies in the AI and semiconductor industries. Nvidia saw a decline of about 4.2%, with Broadcom and Micron dropping nearly 6%, and KLA also down approximately 6%, all amidst renewed uncertainties concerning the scale and timing of major AI investments. This trend was further reinforced by a stronger U.S. yield environment, as higher long-term rates increased discount rates for growth assets with extended durations, hastening profit-taking following substantial gains in January. Earnings reports intensified market volatility: Intuit's shares fell roughly 10.8%, and PayPal's plummeted nearly 20%, attributed to their recent financial results and management changes. Conversely, Palantir's shares rose by almost 5.5% due to an optimistic outlook, while Merck's shares appreciated by 2.5%, contributing to a positive trading session for pharmaceutical stocks.