STORY: The Nasdaq ended sharply lower on Thursday, following a string of record closes, as investors rotated out of Big Tech stocks and into shares of smaller companies.
The Dow edged up marginally. The S&P 500 fell, losing about nine-tenths of a percent, and the tech-heavy Nasdaq plunged roughly 2%.
A Labor Department report showed U.S. consumer prices fell unexpectedly in June, and the annual increase was the smallest in a year, drawing the Federal Reserve closer a September rate cut.
Despite signs of receding inflation, Wall Street’s most valuable companies lost ground, with Microsoft and Amazon each losing more than 2%, Meta Platforms dropping about 4%, and AI chip darling Nvidia shedding 5.5.%
F/m Investments CEO Alexander Morris said it’s about time that market gains broadened beyond Big Tech.
“We needed that capital to find its way beyond 7 or 10 firms in the market. Long-term that wasn’t going to be a healthy thing. We knew there would be a catalyst for it. We thought that would be rates coming down, and we saw when there was news that it was pretty clear rates will be coming down soon enough, the market reacted it more or less as we would have expected.”
Shares of Tesla tumbled 8.4%, its biggest one-day percentage drop since January, after Bloomberg News reported the company is delaying the launch of its robotaxi by about two months to October.
Shares of Apple fell 2.3% after hitting a record high on Wednesday. Still, BofA Global Markets raised its price target for Apple, saying it expects strong iPhone sales driven in part by new AI features.
On the flip side, the small cap Russell 2000, which has significantly lagged the S&P 500 in 2024, jumped 3.6% to close at its highest since March 2022, with investors betting rate cuts would improve conditions for smaller companies.
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