US stocks fell Tuesday, led lower by technology company declines after days of big gains.
The technology-heavy Nasdaq 100 fell 1.9%, while the S&P 500 Index slipped 0.6%. The Philadelphia Semiconductor Index, known as the SOX, dropped 5.7%. Yields on 10-year Treasuries were around 4.43%.
"Momentum is clearly waning," BTIG chief market technician Jonathan Krinsky wrote in a note, adding that the SOX was down for five of the past nine days as some were "getting cold feet."
West Texas Intermediate crude oil declined about 5% to trade around $77 as the US and Iran prepare to formally sign their interim peace deal in Switzerland on Friday.
"Watch for excessive optimism" regarding the US-Iran deal, Ed Clissold, chief US strategist at Ned Davis Research, wrote in a Tuesday note. He warned that sentiment had been "cautious" before recent developments.
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Elsewhere, SpaceX extended gains, advancing 4.8%. The company agreed to take over Cursor in a deal that values the startup at $60 billion, cementing a key part of Elon Musk's efforts to catch up with rivals that provide coding tools to developers.
The boom in AI stocks looks set to continue, according to a Bank of America survey, which found the majority of investors believe that fear of missing out on potential gains continues to drive trading.
"SpaceX going public is an important watershed moment for the broader tech sector" and bodes well for coming debuts for OpenAI and Anthropic, Wedbush analyst Dan Ives wrote in a note. "The tech sector and chip trade still has a lot of room to go higher over the coming months as the stellar demand trends from our recent Asia checks gives us further confidence to own tech stocks into the second half of 2026 with a stronger growth trajectory ahead," he said.
Attention is shifting toward Kevin Warsh's first meeting as chairman of the Federal Reserve. Bloomberg Economics sees a shift in how the central bank communicates with markets as Warsh is unlikely to submit his own "dot" to the closely scrutinized dot plot, breaking with precedent under Jerome Powell, Janet Yellen and Ben Bernanke.
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Sectors in Focus
- Shares of exchange operators Cboe Global Markets and CME Group Inc. extended declines as Commodity Futures Trading Commission Chair Michael Selig defended a decision to approve perpetual futures.
- Fannie Mae, Freddie Mac, and mortgage originators. Fannie and Freddie were downgraded at BTIG analyst Douglas Harter,who said releasing the mortgage-finance giants from government control is unlikely to be a "a near-term area of focus" for the Trump administration. Harter also cut Rocket Cos. and slashed price targets for mortgage originators by ~ 30% on average "to reflect the more challenging interest rate and profitability outlook."
- Software-as-a-service companies, as "explosive" growth in direct lending to them amplifies their vulnerability to interest rates staying higher for longer, according to Apollo Chief Economist Torsten Slok.
- Homebuilders, as US housing starts fell to the weakest pace since 2020. The decline was driven by "the multi-family segment for which the data are especially choppy," Pantheon chief US economist Samuel Tombs wrote in a note. "A recovery in homebuilding remains a long way off," he said, as mortgage rates are too high for many first-time buyers and as builders hold excess inventory as population growth slows.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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