The S&P 500 experienced a pullback on Tuesday, influenced by a decline in Nvidia shares alongside a general downturn in technology stocks. The S&P 500 experienced a decline of 0.59%, concluding at 6,411.37, whereas the Nasdaq Composite decreased by 1.46%, finishing at 21,314.95. The Dow Jones Industrial Average experienced an increase of 10.45 points, representing a change of 0.02%, concluding the session at 44,922.27. The 30-stock index reached a new record high during the session, driven by a surge in Home Depot.

Equities of large-cap technology firms and prominent semiconductor manufacturers experienced a downturn. Nvidia experienced a decline of 3.5%, while Advanced Micro Devices and Broadcom saw decreases of 5.4% and 3.6%, respectively. Shares of the high-flying software company Palantir experienced a decline exceeding 9%, positioning it as the poorest performer within the S&P 500 index. Other significant technology-related entities, including Tesla, Meta Platforms, and Netflix, faced considerable pressure.

“The AI trade may not be breaking, but it could be catching its breath.” “After a 40%+ run for the NASDAQ since April, historically a pause is normal as the market recalibrates around the latest economic data and anticipated Fed policy,” stated Jayson Bronchetti, chief investment officer at Lincoln Financial. “As capital reallocates toward firms in various sectors that exhibit the capacity to leverage AI for enhancing margins and efficiency, a potential rotation and broader engagement could support a more sustainable progression, although short-term volatility is anticipated,” Bronchetti noted.