The Dow Jones Industrial Average is cruising past 52,000 and setting fresh record highs, while the S&P 500 and Nasdaq Composite are heading in the opposite direction. The culprit is a textbook sector rotation: investors are dumping high-flying tech names and piling into the kinds of stocks your grandfather would approve of.
Chipmakers like Nvidia and Broadcom have been taking the brunt of the selling pressure, as money flows into financials, industrials, and real estate.
What the great rotation actually looks like
The Dow has notched its 20th record close of 2026 in early July, a milestone that arrived on the heels of soft June employment data. Weak jobs numbers tend to make investors bet on rate cuts, which tends to benefit cyclical sectors more than growth stocks.
The S&P 500 and Nasdaq, meanwhile, have been exhibiting notable weakness. That’s what happens when the biggest components of those indices, mega-cap tech names, are the ones getting sold. The S&P 500 is far more tech-heavy than the Dow, so when Nvidia sneezes, the index catches a cold.
