S&P 500: Tech-led swings as AI exuberance cools – Deutsche Bank

Deutsche Bank’s Jim Reid describes a volatile session for US equities, with a sharp intraday tech sell-off largely reversing by the close. The S&P 500 and NASDAQ finished modestly lower, while semiconductors underperformed. However, most S&P 500 constituents rose and the equal-weighted index gained, reflecting rotation into more defensive sectors despite ongoing AI and tech crash concerns.

Tech slump offsets broader rotation

"This news came as US equities were in the midst of a pronounced tech-led sell-off and added to the risk-off mood. However, there wasn’t an obvious catalyst for that tech sell-off and with there being no follow up to Trump’s post during market hours, equities ended up largely reversing their losses by the close."

"So the S&P 500 closed a modest -0.26% lower after trading -2.27% intra-day, while the NASDAQ "only" fell -0.97% on the day. We did see underperformance by the Mag-7 (-1.29%) as well as the Philly semiconductor index (-1.93%) but this was much less severe than it had been midway through the session (intra-day lows of -8.62%) as we mentioned at the top. "

"And the picture was actually positive beyond tech, with almost three-quarters of the S&P 500’s constituents up on the day and the equal-weighted index rallying +0.76% amid rotation into more defensive sectors. This morning, S&P 500 (-0.28%) and NASDAQ 100 (-0.45%) futures are a bit lower."

"This performance wasn’t helped by European markets closing before the recovery in US equities emerged, though the more limited exposure to both chips and the broader tech sector meant that the CAC 40 (+0.05%) and the FTSE MIB (+0.11%) posted modest advances. "

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)