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Megacap Tech Sell-Off Drives Nasdaq and S&P Lower as Market Shows Concentrated Rotation

The moves may point to a narrowing rally that hinges on chip earnings and upcoming inflation data.

Overview

  • The Nasdaq fell about 1.32% to 26,166.60 on June 22 while the S&P 500 closed lower and the Dow Jones rose roughly 148 points, reflecting a split market where a few large stocks dragged major indexes down.
  • Alphabet plunged roughly 5% on June 22 and other big technology names including Microsoft, Amazon and Meta also posted multi-percent losses that were primary drivers of the declines.
  • SpaceX dropped about 16.4% in its largest single-day fall after last week’s IPO and the company’s first debt offering on June 22, and that decline weighed heavily on the Nasdaq.
  • Many chip and cyclical names advanced during the session, producing a concentrated pattern of winners and losers, and investors are treating Micron Technology’s June 24 quarterly report as the next key test for the rally.
  • Market sentiment has been affected by a firmer tone from Federal Reserve chair Kevin Warsh that has pushed Treasury yields higher and by reports that U.S.-Iran talks produced a roadmap toward a deal that lowered oil prices and altered risk calculations.