A weakening tech sector pulled the S&P 500 into the red on Thursday even as 10 of its 11 sectors rose. The slide came as the artificial-intelligence trade lost momentum and investors booked profits, while the Dow climbed on strength elsewhere.
Tech alone was enough to drag the S&P 500 lower on Thursday. The index was down 0.2% even though 10 of its 11 sectors traded higher, with the tech sector the lone decliner.
Tech carries the whole loss
The tech sector fell 2.1% while every other group finished in the green. That split is rare: the last time the benchmark closed lower while 10 of its sectors rose was on November 8, 2007, according to Dow Jones Market Data.
The S&P 500 was down 15.32 points, or 0.2%, at 7,557.08 in intraday trading, having rebounded after an early slump but staying in negative territory. The Nasdaq fell 229.34 points, or 0.9%, to 26,039.89. The narrower Dow moved the other way, up 142.44 points, or 0.3%, at 52,801.08.
The AI trade cools
Behind the move, the artificial-intelligence trade lost some momentum as investors opted to take profit, even though the broader macroeconomic backdrop looked good for the market. Investors are questioning how long the AI boom will last, yet still finding places to put money to work.
The pullback may prove short-lived. A strong start to earnings season has helped propel stocks higher, with UnitedHealth and GE Aerospace set to report before the opening bell. According to Barron’s, UBS Global Wealth Management CIO Mark Haefele said: “Earnings should remain the key driver of performance for the remainder of the year”.
The three major indexes had all closed higher on Wednesday, as cooler-than-expected wholesale inflation data offset a selloff in chip makers. The yield on the 10-Year Treasury note ticked up 2 basis points to 4.57%, while the dollar held unchanged against a basket of peers.
Sources: Barron’s, Barron’s, RTTNews (snippet-based)
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