Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 12, 2025.
Brendan McDermid | Reuters
The S&P 500 pulled back on Tuesday, weighed down by Nvidia shares and a broad decline in technology stocks.
The broad market S&P 500 lost 0.59% and closed at 6,411.37, while the Nasdaq Composite fell 1.46% to settle at 21,314.95. The Dow Jones Industrial Average added 10.45 points, or 0.02%, and ended at 44,922.27. The 30-stock index touched a fresh record high during the session, powered by a pop in Home Depot.
Shares of megacap tech and big-name chipmakers declined. Nvidia shares lost 3.5%, while Advanced Micro Devices and Broadcom slipped 5.4% and 3.6%, respectively. Shares of high-flying software stock Palantir dropped more than 9%, making it the S&P 500’s worst performer. Other major tech-related names such as Tesla, Meta Platforms and Netflix were also under pressure.
“The AI trade may not be breaking, but it could be catching its breath. After a 40%+ run for the NASDAQ since April, historically a pause is normal as the market recalibrates around the latest economic data and anticipated Fed policy,” said Jayson Bronchetti, chief investment officer at Lincoln Financial.
“As capital shifts toward companies across more sectors who demonstrate an ability to apply AI to boost margins and efficiency, potential rotation and wider participation may underpin a more durable advance, though near-term chop is likely,” Bronchetti added.
Nasdaq intraday chart
Home Depot shares rose 3% after the home improvement giant maintained its full-year outlook. To be sure, its second-quarter earnings came in below expectations. Investors await earnings from Lowe’s, Walmart and Target due later this week for insight on how the consumer is faring amid a mixed inflation outlook and evolving U.S. trade policy.
Wall Street is also looking for clues from Federal Reserve Chair Jerome Powell as to what will happen at the central bank’s remaining policy meetings this year. Central bank officials from around the globe will convene this week in Jackson Hole, Wyoming for the Fed’s annual economic symposium.
The fed funds futures market is indicating an 85% chance for a quarter-point rate cut at the Fed’s next policy meeting in September, according to CME’s FedWatch tool.
“Friday’s Jackson Hole speech is likely an inflection point for markets as we believe Jerome Powell will signal that rate cuts are likely at the upcoming September meeting,” said Stephen Schwartz, founding partner of wealth management firm Pioneer Financial.
“Valuations may even have more room to expand as we move into the back half of 2025 as investors will at that time start to price-in at 2026 earnings, which are expected to improve thanks to the potential for lower interest rates and improved tariff policy clarity,” he added.
