US stocks experienced a mixed day of trading on Tuesday, with Big Tech's weakness weighing heavily on the broader market. The Dow Jones Industrial Average ended the session slightly above the flat line, while the S&P 500 slipped around 0.6%. The Nasdaq Composite, heavily influenced by tech stocks, saw a substantial dip of about 1.5%, continuing the trend of subdued performance for major indexes. Leading the losses in the tech sector was Palantir, with a staggering 9% drop, followed by AMD sliding more than 5%, and chip giant Nvidia declining by approximately 3.5%.
In recent months, the market had been dominated by a select group of growth giants, but there has been a noticeable shift in leadership. Sectors like Health Care, Homebuilders, and small- and mid-cap stocks have started playing a more significant role in driving the market to new highs this summer. However, on Tuesday, the market saw gains concentrated in defensive sectors such as Real Estate, Consumer Staples, Utilities, and Health Care.
Earnings reports from retail giants kicked off the session, with Home Depot revealing its second-quarter results slightly below Wall Street's estimates. Despite this, the company's shares closed up 3% as the report indicated a return to consistent same-store sales growth in the US, hinting at a potential thaw in the previously sluggish US housing market. Investors are eagerly awaiting upcoming earnings reports from Target and Walmart to gauge the impact of Trump's tariffs on both companies and consumers.
In the tech arena, Intel's stock received a boost after SoftBank announced a $2 billion stake in the chipmaker, which is currently in the midst of a strategic turnaround. Speculation surrounding a potential 10% stake in Intel by the Trump administration added to the market buzz.
Amidst all this, geopolitical tensions remained in focus as President Trump continued to push for further Ukraine talks, reportedly urging Russian President Vladimir Putin to meet with Volodymyr Zelensky. European leaders showed support for the Ukrainian president during his meeting with Trump, although uncertainty loomed over the region's future, giving markets a reason to pause.
As the market continues to navigate a landscape of evolving trends and developments, investors are closely monitoring the rotation within sectors. With eight out of the 11 sectors in the S&P 500 ending the day in the green, there is clear momentum in certain areas like Real Estate, Consumer Staples, and Healthcare. However, the ongoing weakness in large-cap technology stocks highlights the importance of a diversified investment approach.
Overall, the market's resilience in the face of various headwinds reflects a complex interplay of factors that drive investor sentiment and market movements. As investors brace for upcoming events like Fed Chair Jerome Powell's speech at Jackson Hole and further earnings releases, the market's trajectory remains dynamic and influenced by a multitude of domestic and global factors.