A renewed wave of tech sector selling pressured major U.S. indices on Monday, with the Nasdaq Composite falling 1.8% and the S&P 500 dipping 0.6%. The move followed a brief rally in early December, as investors reassessed valuations and rotated out of high-flying growth stocks.
- Nasdaq Composite dropped 1.8% to 17,245.32, its largest one-day decline since November 20.
- Apple (AAPL) fell 2.4%, Microsoft (MSFT) declined 1.9%, and Nvidia (NVDA) dropped 3.7%.
- S&P 500 slipped 0.6% to 5,388.17; Dow Jones dipped 0.3% to 41,215.43.
- Russell 2000 declined 1.1%, reflecting broader market risk aversion.
- CBOE Volatility Index (VIX) rose 14% to 17.8, signaling heightened uncertainty.
- Tech stocks remain up 22.3% year-to-date, despite the correction.
Technology stocks led the market downturn Monday, with the Nasdaq Composite closing at 17,245.32 after shedding 310.5 points. The decline marked the index’s steepest single-day drop since November 20, driven largely by losses in mega-cap names. Apple Inc. (AAPL) fell 2.4%, while Microsoft Corp. (MSFT) declined 1.9% amid concerns over elevated P/E ratios and slowing cloud growth. Nvidia Corp. (NVDA) dropped 3.7% despite a strong earnings report earlier in the week, as traders took profits after a 65% year-to-date rally. The S&P 500 registered a 0.6% decline to 5,388.17, as tech’s drag was partially offset by gains in defensive sectors. The Dow Jones Industrial Average slipped 0.3% to 41,215.43, with energy and industrials showing modest resilience. The Russell 2000 small-cap index declined 1.1%, reflecting broader risk aversion. Market volatility, as measured by the CBOE Volatility Index (VIX), spiked 14% to 17.8, signaling increased uncertainty. Despite the pullback, the broader market remains in positive territory for the year. The Nasdaq is up 22.3% year-to-date, the S&P 500 has gained 14.6%, and the Dow has risen 10.4%. Analysts note that the recent tech selloff is not indicative of a fundamental shift, but rather a cyclical correction following strong momentum. The Federal Reserve’s recent pause in rate hikes and a cooling inflation backdrop continue to support long-term market sentiment, but near-term valuations have drawn scrutiny. The rotation out of tech has benefited sectors such as utilities, consumer staples, and financials, which posted gains. Investors are also monitoring upcoming earnings from major banks and the December jobs report for additional guidance on economic resilience. The tech sell-off has prompted a repositioning in portfolios, with some hedge funds trimming exposure to artificial intelligence and semiconductor stocks ahead of the new year.