Aniket PujariA selloff in Wall Street’s largest technology companies dragged down the stock market, with investors also gearing up for Wednesday’s Federal Reserve decision that will likely bring an assessment of how President Donald Trump’s trade policies are impacting the economy.
Equities halted a back-to-back rally from technically oversold levels. The cohort of tech megacaps dubbed “Magnificent Seven” hit the lowest since September, with Tesla Inc. down 6% Nvidia Corp. falling 3.5% in the run-up to chief Jensen Huang’s keynote speech.
Tesla was one of the heaviest weights on the market after falling 6.1%. The electric-vehicle maker’s stock has been struggling on worries that it will lose sales because of anger at its CEO, Elon Musk, who has been leading efforts to cut spending by the U.S. government. EV rivals, meanwhile, continue to chip away at its business. China’s BYD on Monday announced an ultra-fast charging system that it says is nearly as quick as a gasoline fill-up.
Alphabet sank 3.8% after the owner of Google said it would buy cybersecurity firm Wiz for $32 billion. It would be the company’s most expensive purchase in its 25-year history, and it could boost the tech giant’s in-house cloud computing amid burgeoning artificial-intelligence growth.
The drop for Big Tech continues a trend that’s taken hold in the market’s recent sell-off: Stocks whose momentum had earlier seemed unstoppable have since dropped sharply following criticism that they had simply grown too expensive.
Chief among them have been stocks that zoomed higher in the frenzy around AI technology. Nvidia fell 3.2%. Super Micro Computer, which makes servers, lost 4.4%. Palantir Technologies, which offers an AI platform for customers, sank 4.9%.
These stocks have been among the biggest losers as Wall Street retrenches amid uncertainty about what President Donald Trump’s trade war will do to the economy.
Even so, all three major U.S. stock indexes were lower in early trading, with weakness in tech-related megacap stocks dragging the tech-laden Nasdaq down the most. The Dow Jones Industrial Average fell 234.13 points, or 0.56%, to 41,606.96, the S&P 500 slid 59.72 points, or 1.05%, to 5,615.40 and the Nasdaq Composite slipped 324.68 points, or 1.82%, to 17,483.99.
A new round of Israeli missile attacks on the Gaza Strip, killing over 400 people, brought Middle East tensions from a simmer to a boil, even as U.S. President Donald Trump and Russian President Vladimir Putin were expected to discuss terms of a potential end to Russia’s war on Ukraine.
The U.S. Federal Reserve is slated to convene for its two-day monetary policy meeting, which is expected to culminate in the central bank leaving its key interest rate where it is until further inflation progress is made and the effects of the Trump administration’s erratic tariff policies are known.
On the economic front, a stronger-than-expected rebound in single family housing starts and robust industrial output data provided a welcome change from generally lackluster recent indicators, providing some reassurance that the U.S. economy is not in danger of imminent recession.
