On the 9th, New York time, the three major indexes on the New York Stock Exchange ended mixed after a divergent session. Core tech stocks and semiconductor shares that had driven the artificial intelligence (AI) boom fell across the board, dragging the broader market lower. In contrast, a clear rotation unfolded as large amounts of investment money shifted to traditional value stocks and consumer staples corporations that had been overlooked.
The blue-chip Dow Jones Industrial Average finished up 86.10 points, or 0.17%, at 50,872.11 from the prior session. By contrast, the large-cap Standard & Poor's (S&P) 500 fell 19.08 points, or 0.26%, to 7,386.65. The tech-heavy Nasdaq composite also slipped 0.97% to close at 25,678.82.
Semiconductor shares were broadly weak and pulled the market down. The iShares Semiconductor ETF, which had surged 6% the previous day in what looked like a rebound, fell back 1% in a single day. The fund plunged 10% on Friday after investors worried that AI-related stocks had risen too far too fast. Individual names also struggled. Micron Technology gave up the prior day's 10% rebound and fell 1%, and Broadcom also dropped 1%.
Wall Street investment experts said concerns about tech overvaluation are turning into a full-fledged wave of selling. Brett Kenwell at the investment platform eToro said, "A market rally concentrated in specific tech stocks has an unstable foundation," adding, "the upside momentum needs to broaden to other sectors." Strategists at Charles Schwab also noted, "Excessive complacency had spread through the market," and assessed that "investors are now moving to take profits."
Money rotating out of tech flowed straight into defensive old-economy sectors such as utilities, healthcare, and real estate. J.M. Smucker, known for Smucker's jam and Jif peanut butter, released stronger-than-expected fourth-quarter results, sending its shares up 3.5%. Stocks of dwellings remodeling and construction-related corporations such as The Home Depot, Inc. and Sherwin-Williams also climbed sharply. Existing-home sales in May, released by the National Association of Realtors on the day, rose 3.2% from the prior month to an annualized 4.17 million, far topping market forecasts.
Global geopolitical tensions and movements in international oil prices also had mixed effects on the market. West Texas Intermediate futures fell 3.4% to settle at $88.20 a barrel. President Donald Trump raised expectations by saying a deal between the United States and Iran could be reached within days. Chris Wright, U.S. Minister of Energy, also said vessel traffic in the Strait of Hormuz, a key artery for global crude shipments, is rising meaningfully, adding to the downward pressure on oil. But after the close, Trump said the United States must respond to Iran's attack on a U.S. helicopter, denting hopes for a quick resolution and reviving concerns about a prolonged war.
Another major swing factor adding to market volatility is news of mega initial public offerings. SpaceX, valued at $1.75 trillion, is set for the largest-ever listing on the 12th. OpenAI also quietly filed listing documents, unsettling the market. Anthony Salimbene of Ameriprise said, "When a massive IPO that will suck up enormous capital approaches, institutional investors sell tech stocks where they have made big gains to raise cash." The view is that the emergence of giant AI corporations and space corporations is draining cash from the existing stock market.