Stocks Pare Tech-Led Drop as Rotation Gains Speed: Markets Wrap
(Bloomberg) — A rotation that has seen investors bail from richly priced technology names in favor of more economically sensitive industries resumed, with stocks trimming losses in the final stretch of trading.
While weakness in the S&P 500’s most-influential group squelched a market rebound, the benchmark almost erased a 2.3% slide as most of its shares rose. Chipmakers, which had powered the recovery from war-driven lows, swung violently. The Nasdaq 100 lost 1.1%. Oil pared its drop as President Donald Trump said the US must respond to Iran’s attack on an American helicopter, dimming hopes for a quick resolution to their conflict.
The renewed volatility in semiconductor giants came after a surge that had put the sector on track for its best year since 1999. While the industry’s long-term outlook remains tied to a flood of spending on artificial intelligence, investors are increasingly questioning whether valuations can keep pace after one of the market’s most-powerful advances.
“As much as we love to see tech’s leadership, it would be constructive to see this rally broaden out to other sectors,” said Bret Kenwell at eToro. “When leadership is concentrated in one corner of tech, the market’s foundation gets a little wobblier.”
The recent whipsawing in tech is giving investors a taste of how quickly the tide may turn for the biggest winners should sentiment flip. While pinpointing the volatility’s cause has been difficult, it’s occurring in high-valuation stocks ahead of massive new equity issuance, including SpaceX’s expected IPO pricing this week.
A flood of shares from companies seeking capital to fund AI ambitions is raising questions about whether demand will be sufficient to absorb the issuance and what the implications will be for broader valuations.
A deal of SpaceX’s size can be bullish over the long run if it reflects deep demand for innovation and new public-market opportunities, according to Anthony Saglimbene at Ameriprise. However, in the near term, large offerings also raise a basic funding question.
“Where does the money come from?” he said. “Some demand may come from cash. Some may come from new retail participation. But institutional participation in a deal of this scale can also require trimming existing winners, particularly in areas where investors already have large gains.”
Upcoming megacap IPOs are “adrenaline” for a bull market hitting its prime, but they do not signal euphoria yet, according to Robert Edwards at Edwards Asset Management.
“We’re at the start of a frenzied buying spree worth riding,” he noted. “True euphoria hits when everyone’s flipping the next IPO ‘wunderkind’ and bankers are rushing questionable, pre-revenue deals that suck up cash. We’re still in the speculative phase, and the run toward euphoria is one you don’t want to miss.”
Corporate Highlights:
SpaceX’s initial public offering has attracted demand from institutional investors for multiple times the available shares, according to people familiar with the matter, as the Elon Musk-led rocket, satellite and artificial intelligence firm’s debut gets closer. Anthropic PBC is widely releasing a version of Mythos that will be blocked from carrying out cybersecurity tasks, months after warning that the powerful AI model could spot and exploit vulnerabilities in critical software. The Federal Reserve said it will unveil the results of how big banks fared during its stress test on June 24, but emphasized the results will not impact capital requirements this year. Vail Resorts Inc. cut its net income guidance for the full year, attributing the reduction to “historically challenging” weather conditions in the western US. GSK Plc agreed to buy Nuvalent Inc. for $10.6 billion, securing a US biotech firm developing treatments for lung cancer as part of the British pharmaceutical company’s effort to rebuild its oncology franchise. What Bloomberg strategists say…
“While Tuesday is not total risk-off yet, it sends a warning that the AI-momentum trade has lost its one-way nature as dip buyers remain cautious.”
—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.3% as of 4 p.m. New York time The Nasdaq 100 fell 1.1% The Dow Jones Industrial Average rose 0.2% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1542 The British pound rose 0.3% to $1.3379 The Japanese yen fell 0.2% to 160.41 per dollar Cryptocurrencies
Bitcoin fell 2.3% to $62,002.86 Ether fell 1.9% to $1,657.64 Bonds
The yield on 10-year Treasuries declined four basis points to 4.52% Germany’s 10-year yield declined two basis points to 3.04% Britain’s 10-year yield declined four basis points to 4.90% Commodities
West Texas Intermediate crude fell 3.1% to $88.50 a barrel Spot gold fell 1.7% to $4,257.71 an ounce ©2026 Bloomberg L.P.
