To The Moon

Technology stocks suffered a steep decline for the second consecutive trading session as a sell-off in software shares, triggered by artificial intelligence concerns, once again spread to the broader market. The Nasdaq 100 Index closed down 1.8%, marking its second straight day of losses and registering its largest two-day drop since October of last year. Shares of AMD plunged, recording their most significant single-day decline in over seven years, as the chipmaker's sales forecast disappointed investors. The S&P 500 Index fell 0.5%, while the VIX volatility index hovered near the 19 level. "This is a rotation, not a rupture," stated Mark Hackett, Chief Market Strategist at Nationwide. "As technology stocks pull back, cyclical and defensive stocks are taking the baton. While Tuesday's volatility captured attention, the data suggests this is a technical adjustment rather than a fundamental breakdown." The trend of capital flowing out of software stocks showed little sign of abating, with investors worried about the commercial impact of more powerful AI tools. The iShares Expanded Tech-Software Sector ETF declined by 1.8%, with AppLovin and Intapp leading the losses. Nvidia CEO Jensen Huang commented that the market's sell-off in software stocks this week, driven by fears of AI disruption, was unfounded. With the partial U.S. government shutdown restricting the release of official data, markets increasingly turned to alternative data sources. Data released by ADP indicated that U.S. companies added far fewer jobs than expected in January, suggesting a continued slowdown in the labor market at the start of the year. U.S. service providers registered their strongest month-over-month growth so far in 2024, as business activity showed some recovery. At the market close, the S&P 500 Index was down 0.5% at 6,882.72 points. The Dow Jones Industrial Average rose 0.5% to 49,501.3 points. The Nasdaq Composite Index fell 1.5% to 22,904.58 points. The Nasdaq 100 Index dropped 1.8% to 24,891.24 points. The Russell 2000 Index declined 0.9% to 2,624.546 points.