Summary<\/p>\n
Stocks were volatile Tuesday as investors sold artificial intelligence stocks after a recent rally.
\n The Nasdaq Composite dropped about 1% and semiconductor companies bore the brunt of the selling.
\n Oil prices pared some losses following a social media post by President Donald Trump about Iran shooting down an Apache helicopter.<\/p>\n
\n AI-generated summary was reviewed by a CNN editor.<\/p>\n
New York\u00a0\u2014\u00a0\n <\/p>\n
\n Stocks swung in volatile trading Tuesday as investors sold AI-related names, rotated into other sectors and took profits after a strong rally in recent months.\n <\/p>\n
\n The tech-heavy Nasdaq Composite opened higher before dropping more than 3.6% in a rapid reversal during trading. But investors stepped in to buy the dip, and by the closing bell, the Nasdaq was down only 0.97%.\n <\/p>\n
\n Similarly, the S&P 500 fell more than 2.2% before dip-buyers stepped in. The S&P ended the day down just 0.26%. The Dow, which has less exposure to tech, gained 86 points, or 0.17%, recouping losses after tumbling about 575 points earlier.\n <\/p>\n
\n After an extraordinary rally this year, semiconductor chip makers bore the brunt of the selling. Declines in tech and AI stocks, including the chipmakers, weighed on the major indexes.\n <\/p>\n
\n \u201cIt\u2019s not unusual to see a period of consolidation after exceptional performance,\u201d said Bill Northey, senior investment director at US Bank Asset Management.\n <\/p>\n
\n The fundamentals underpinning the chipmaker rally<\/a> this year are real, Northey said, but when one sector has such strong performance, it should be expected that there are \u201cbouts of consolidation \u2026 as enthusiasm ebbs and flows.\u201d\n <\/p>\n \n The Nasdaq and S&P on Friday had their worst day<\/a> so far this year. Markets rebounded on Monday. But the volatility picked up again on Tuesday, halting the rebound.\n <\/p>\n \n A popular index that tracks semiconductor companies dropped almost 2%, paring losses after tumbling more than 8.5% during trading. Nvidia (NVDA<\/a>), the largest company in the S&P 500 by market value, fell about 0.2%, recouping most losses after dropping more than 4%.\n <\/p>\n \n Marvell Technology (MRVL<\/a>), a chipmaker, sank 7.6%. Broadcom (AVGO<\/a>) dropped 1.1%, paring losses after falling more than 6.5%. Broadcom is coming off its worst week in a year and a half after its guidance for chip revenue slightly missed expectations.\n <\/p>\n \n After rallying 20% in April and another 20% in May, an exchange-traded fund tracking the tech sector is down about 5% this month, reflecting the pullback in AI-related stocks.\n <\/p>\n \n The S&P 500 and Nasdaq are weighted by market value, meaning the larger a company by market value, the more influence it has on the indexes\u2019 performance. That means tech and AI stocks often move the market as a whole.\n <\/p>\n \n Tech had a rough Tuesday, dragging the S&P and Nasdaq lower. But under the hood, the performance was more positive: More than 350 stocks in the S&P closed higher on Tuesday despite the index ending the day down 0.26%.\n <\/p>\n \n The market volatility also comes ahead of SpaceX\u2019s highly anticipated initial public offering. Some investors could be selling stocks to raise cash to prepare to buy SpaceX shares or just not buying stocks to wait for the SpaceX IPO.\n <\/p>\n \n \u201cInvestors are really trying to figure out how to position themselves for SpaceX,\u201d said Michael Monaghan, partner and portfolio manager at Founder ETFs.\n <\/p>\n \n \u201cBecause all eyes are on the deal, people aren\u2019t looking at what other stocks they\u2019re going to be initiating new positions on or buying in their portfolio,\u201d Monaghan said.\n <\/p>\n \n Meanwhile, oil prices pared some losses after President Donald Trump posted on social media that Iran shot down a US Army Apache helicopter. The two pilots involved are safe and uninjured, Trump said.\n <\/p>\n \n \u201cThe United States must, of necessity, respond to this attack,\u201d he said.\n <\/p>\n \n Brent crude fell about 3% to $91.45 per barrel. US crude oil fell 3.4% to $88.20 per barrel. US oil had dropped as low as $86 per barrel before Trump\u2019s post.\n <\/p>\n \n The decline in oil prices helped ease nerves about inflation, bringing US Treasury yields lower. But the key 10-year yield remains above 4.5%, potentially pulling investors away from stocks.\n <\/p>\n \n Since hitting record highs on June 2, the S&P 500 and Nasdaq are down about 3% and 5%, respectively. All told, the S&P is still up about 8% this year, and the Nasdaq is up more than 10%.\n <\/p>\n \n \u201cA lot of the sell-off from our perspective is an opportunity to buy some really essential, critical AI infrastructure stocks at cheaper prices,\u201d said Rob Thummel, portfolio manager at Tortoise Capital.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Summary Stocks were volatile Tuesday as investors sold artificial intelligence stocks after a recent rally. 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