U.S. stocks closed mixed on Tuesday as a broad technology selloff weighed heavily on the Nasdaq Composite, while the Dow Jones Industrial Average managed to eke out modest gains despite the sector rotation away from high-growth tech names.
Key Market Movements
“The session reflected growing investor caution ahead of Federal Reserve Chair Jerome Powell’s highly anticipated Jackson Hole speech.”
The Nasdaq Composite suffered its worst session since April’s tariff-induced volatility, plummeting 314.82 points or 1.46% to close at 21,314.95. The tech-heavy index was dragged down by semiconductor and artificial intelligence stocks, with Nvidia Corporation leading the decline.
The S&P 500 fell 37.78 points or 0.59% to finish at 6,411.37, as technology sector weakness overwhelmed gains in other areas of the market. Despite the decline, the broad market index remains up approximately 9% year-to-date.
The Dow Jones Industrial Average bucked the trend, ending nearly flat with a modest gain after briefly touching all-time highs during the session. The blue-chip index closed at 44,836.33, down just 75.49 points or 0.17%.
Sector Performance and Notable Movers
Technology Sector Under Pressure: The Nasdaq 100 experienced its second-worst drop since April, falling 1.4% as investors rotated out of high-valuation tech stocks. Nvidia Corporation was the primary culprit, tumbling 3.5% and dragging down the broader semiconductor complex.
“Intel Corporation surged following news of a significant investment from SoftBank, providing one of the few positive catalysts in an otherwise challenging day for technology stocks.”
Intel Provides Bright Spot: Bucking the tech sector trend, Intel Corporation surged following news of a significant investment from SoftBank, providing one of the few positive catalysts in an otherwise challenging day for technology stocks.
Palantir Technologies also faced selling pressure, contributing to the broader tech decline as investors reassessed valuations in the artificial intelligence space.
Market Dynamics and Investor Sentiment
The session reflected growing investor caution ahead of Federal Reserve Chair Jerome Powell’s highly anticipated Jackson Hole speech, with market participants positioning defensively as they await potential policy signals from the central bank.
Housing market data released during the session provided mixed signals about the broader economic landscape, adding to the cautious sentiment that has characterized trading in recent sessions.
Energy and real estate sectors continued to face headwinds, extending Monday’s weakness as investors remained selective in their sector allocation strategies.
Looking Ahead
“With the S&P 500 trading near record levels, a Reuters poll released Tuesday suggests the index may end 2025 around 6,300 points, reflecting tempered optimism amid ongoing economic uncertainties.”
With the S&P 500 trading near record levels, a Reuters poll released Tuesday suggests the index may end 2025 around 6,300 points, reflecting tempered optimism amid ongoing economic uncertainties.
The Russell 2000 small-cap index has shown resilience year-to-date, up 10.4%, outpacing the Dow’s 5.6% gain but trailing the Nasdaq’s impressive 10.4% advance.
Market participants will continue to focus on Jackson Hole developments and upcoming economic data releases as they navigate the current environment of elevated valuations and shifting monetary policy expectations.
Trading volume remained elevated as institutional investors adjusted portfolios ahead of the Federal Reserve symposium, with particular attention paid to any signals regarding future interest rate policy and economic outlook.
The mixed session underscores the ongoing tension between strong corporate earnings growth and concerns about valuation levels, particularly in the technology sector that has driven much of this year’s market gains.
