Tech Stocks Tumble as Nasdaq Posts Worst Day Since 2022

Wall Street experienced a significant shift on Wednesday as investors rotated out of high-flying technology stocks, leading to a steep decline in the Nasdaq Composite and S&P 500. The Nasdaq dropped 2.8%, its worst day since December 2022, closing below 18,000 for the first time since July 1. The S&P 500 fell 1.4%, while the Dow Jones Industrial Average bucked the trend, rising 0.6% to close above 41,000 for the first time.

This selloff followed a Bloomberg report suggesting the Biden administration might impose stricter trade restrictions on Chinese tech firms, impacting semiconductor stocks heavily. Nvidia shares fell 6.6%, and Advanced Micro Devices dropped 10.2%. The VanEck Semiconductor ETF saw its worst day since March 2020, plummeting over 7%. This decline in tech stocks, which have been driving the market's rally this year, marked a notable shift as investors turned towards more rate-sensitive stocks amid optimism for potential interest rate cuts by the Federal Reserve.

Investors are recalibrating their portfolios, taking profits from tech giants like Microsoft, Apple, and Meta Platforms, which saw declines ranging from 1.3% to 5.7%. Meanwhile, UnitedHealth's 4.5% gain, following a Wall Street upgrade, helped the Dow continue its upward trajectory. This rotation reflects growing optimism about lower borrowing costs benefiting smaller, cyclical companies as indicated by the Russell 2000 index's recent performance.

(Sources: Krytal Hur, Sean Lyngaas CNN, Alex Harring, Pia Singh CNBC)