U.S. stocks ended sharply lower for the second straight session, with the S&P 500 recording its fourth straight day of losses, as investors continued to offload tech stocks on growing concerns over the valuation of artificial intelligence (AI) stocks. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 1.1% or 498.50 points, to finish at 46,091.74 points.
The S&P 500 declined 0.8%, or 55.09 points, to end at 6,617.32 points. Tech and consumer discretionary stocks were the worst performers.
The Technology Select Sector SPDR (XLK) lost 1.6%, while the Consumer Discretionary Select Sector SPDR (XLY) declined 1.9%. Six of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq plummeted 1.2%, or 275.23 points, to close at 22,432.85 points.
The fear gauge, CBOE Volatility Index (VIX), was up 10.32% to 24.69. On the Nasdaq, a 1-to-1 ratio favored advancing issues. A total of 18.66 billion shares were traded on Tuesday, lower than the last 20-session average of 20.2 billion.
On the Nasdaq, there were 2,353 new highs and 2,350 new lows.
Markets Turn Volatile as Tech Slump Continues
Tech stocks continued to remain under pressure, as investors remained concerned about the sky-high valuations of AI stocks. The S&P recorded its fourth straight session of losses, its longest stretch of declines since August.
The Dow, at one point, fell as much as 700 points. The S&P 500 and the Nasdaq were also more than 1.5% and 1.2% down at their session lows. Big tech companies, particularly those focused on AI, led the bloodbath.
NVIDIA Corporation (NVDA) extended its losses from the previous session and ended the day 2.8% lower. The AI chip darling has now declined more than 10% this month. The decline comes as the semiconductor company gears up to announce its quarterly results on Wednesday after the bell.
Other tech giants like Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN) also fell 2.7% and 4.4%, respectively. Microsoft has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Retailers Report Quarterly Results
Investor sentiment was further dented after a disappointing earnings report from The Home Depot, Inc. (HD). The earnings season is nearing an end, but this is a big week for some major retailers that will be reporting their quarterly results.
Shares of Home Depot plummeted 6% after it missed on earnings and gave a weak forecast for full-year profit. The retailer reported third-quarter fiscal 2025 earnings of $3.74 per share, missing the Zacks Consensus Estimate of $3.81 per share.
Other major retailers like Walmart, Inc. (WMT), Target Corporation (TGT), too, are scheduled to announce their quarterly results this week.
Investors are also looking forward to the key September jobs report and the minutes of the Federal Reserve’s October FOMC meeting, scheduled for release this week.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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