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(Bloomberg) — A rotation that has seen investors bail from richly priced technology names in favor of more economically sensitive industries resumed, dragging down the S&P 500 while lifting the majority of its companies.
The group of chipmakers that had led the run from war-driven lows came under intense volatility, erasing a rally to plunge 8%. The Nasdaq 100 fell 4%. Despite the tech rout, over 300 shares in the equity benchmark rose. Oil pared its drop after President Donald Trump said the US must respond to Iran’s attack on an American helicopter, dimming hopes for an end to the conflict.
Heightened swings in giant semiconductor firms came on the heels of an advance that had put the industry’s stocks on track for their best year since 1999. While those companies continue to benefit from the flood of cash being spent on artificial intelligence, calls for consolidation have emerged after such a powerful surge.
“As much as we love to see tech’s leadership, it would be constructive to see this rally broaden out to other sectors,” said Bret Kenwell at eToro. “When leadership is concentrated in one corner of tech, the market’s foundation gets a little wobblier.”
