US Stocks Mixed: Tech Drags S&P 500, Dow Gains

The technology sector faced significant selling pressure throughout the trading session, with the XLK technology fund falling nearly 1% as investors reassessed valuations in the face of weakening economic data. The Nasdaq Composite’s 0.6% decline outpaced the broader market’s losses, reflecting the concentrated nature of the selloff in tech names. The sector’s weakness proved particularly damaging for the S&P 500, where technology companies represent a substantial portion of the index’s weighting.

Nvidia emerged as the most prominent casualty, dropping 3% after SoftBank sold its entire $5.83 billion stake in the chipmaker. The massive divestment came despite Nvidia’s dominant position in the artificial intelligence hardware market, raising questions about whether even the strongest players in the tech ecosystem face headwinds. The selling pressure extended beyond individual stocks to the broader AI sector, with infrastructure company CoreWeave plunging 11% after issuing weak forward guidance that disappointed investors expecting continued rapid expansion.

While technology stocks dragged down the S&P 500 and Nasdaq, the Dow Jones Industrial Average managed to buck the trend with an 85-point gain, representing a 0.2% advance. The divergence highlighted the uneven nature of the market’s performance, with traditional industrial and consumer stocks providing stability while growth-oriented technology names faced selling pressure. The S&P 500’s 0.3% decline reflected this tug-of-war between sectors, ending the session in negative territory but avoiding the steeper losses seen in tech-heavy indices.

The mixed performance across major indices underscored ongoing sector rotation as investors grapple with conflicting economic signals. The Dow’s resilience suggested that not all market participants were retreating from risk entirely, but rather reallocating capital away from sectors perceived as most vulnerable to economic slowdown. This selective approach to risk-taking kept the broader market from experiencing more severe declines, though the underlying weakness in technology—a key driver of market gains in recent years—remained concerning for bulls.

Beyond sector-specific concerns, broader economic worries weighed on investor sentiment following the release of a disappointing ADP jobs report. The data showed private payrolls declining by 11,000 per week, signaling potential cooling in the labor market that has been a cornerstone of economic strength. The weaker-than-expected employment figures raised questions about consumer resilience and corporate earnings potential, particularly for technology companies dependent on robust business investment and consumer spending.

The jobs data compounded existing concerns about economic momentum, coming amid ongoing debates about the Federal Reserve’s interest rate path and the sustainability of corporate profit growth. Markets have been particularly sensitive to employment indicators as they provide crucial insight into consumer health and overall economic direction. The ADP report’s suggestion of weakening job creation added to the cautious tone that permeated the trading session, despite some positive political developments.

Some positive news emerged from Washington as the Senate passed legislation to end the government shutdown, providing a modest boost to market sentiment. The political progress helped prevent a more severe market downturn by removing one element of uncertainty that had been hanging over investors. However, the limited market reaction to this development suggested that traders remain focused on fundamental economic concerns rather than political headlines.

The muted response to the shutdown-averting bill passage highlighted the market’s primary concerns about corporate earnings and economic data rather than political drama. While the legislation prevented additional economic disruption from a prolonged government closure, it failed to address the underlying issues driving the technology selloff and broader market caution. Investors appeared to recognize that while political stability is preferable, it cannot alone overcome weakening economic indicators and sector-specific challenges.