S&P 500 And Dow Set Records As Tech Stocks Dip
What’s going on here?
The S&P 500 and Dow Jones both notched record closes this week, but the party faded fast as tech stocks tumbled, sending the Nasdaq Composite into the red.
What does this mean?
Investors piled into utilities and other defensive stocks, which helped offset losses in the tech sector and underscored a shifting market mood. Applied Materials, a heavyweight in chip equipment, warned of a $600 million hit to 2026 revenue, spooking the broader semiconductor space and putting pressure on tech shares. Tesla’s 1.4% share drop helped push the Nasdaq lower, while elsewhere, USA Rare Earth soared more than 14% after its CEO highlighted close ties to the White House, hinting at possible government support. Still, optimism was checked by uncertainty as a US government shutdown stretched into its third day, delaying key jobs reports and clouding the economic picture. Recent soft labor data and a falling ISM services employment index have intensified debate over whether the Federal Reserve will cut rates, especially as inflation stays stubbornly above target.
Why should I care?
For markets: Investors find hope in defensive stocks.
Utilities led the charge as investors sought safe ground, while tech’s stumble brought a cautious mood despite record-setting main indexes. Higher-than-normal trading activity and more winners than losers on both the NYSE and Nasdaq suggest confidence is holding up—for now. But with the government shutdown stalling key economic updates, markets are navigating without a compass until the data landscape clears up.
The bigger picture: Economic uncertainty clouds the rally.
Momentum still favors bulls as the S&P 500 and Dow press higher, but political gridlock threatens to derail economic transparency and policymaking. Delayed labor data and wait-and-see Fed attitudes complicate economic projections and strategy. While investors are celebrating new highs, unsettled risks could easily shape where the market heads next.
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