The Dow Jones Industrial Average rallied on Tuesday while the Nasdaq Composite faltered, as investors shifted funds from high-valued technology shares into more defensive sectors such as health care.
The move reflected renewed caution toward artificial intelligence-linked stocks, which have faced pressure this month amid valuation concerns and mixed earnings results.
The blue-chip Dow rose 548 points, or 1.1%, boosted by strong gains in Merck, Amgen, and Johnson & Johnson.
The S&P 500 added 0.2%, while the tech-heavy Nasdaq slipped 0.2%, marking its third decline in five sessions.
The rotation into value stocks came as investors reassessed lofty tech valuations and looked for stability in sectors with lower price-to-earnings multiples.
Tech and AI stocks slide on disappointing guidance
AI infrastructure provider CoreWeave was among the biggest laggards, plunging 15% after issuing full-year revenue guidance below Wall Street expectations.
The company forecast sales between $5.05 billion and $5.15 billion, missing the $5.29 billion estimate from analysts polled by LSEG.
Shares of Nvidia also weighed on sentiment, dropping 2.5% after SoftBank disclosed that it had sold its entire $5.83 billion stake in the chipmaker.
The sale sparked renewed worries about profit-taking in AI-linked equities.
Other chip and software names also followed suit: Micron Technology fell 4%, Oracle lost 2.5%, and Palantir Technologies slipped 1%.
The Technology Select Sector SPDR Fund (XLK), which tracks the S&P 500 tech sector, declined nearly 1%.
The weakness in tech comes as the Nasdaq’s month-to-date losses exceed 1%, underscoring the sector’s growing sensitivity to valuation pressures.
The AI trade, which drove much of the market’s rally earlier in the year, has cooled in recent weeks amid profit-taking and tighter monetary policy expectations.
Economic data and stock movers
Investor sentiment was also affected by fresh labor market data.
A report from ADP showed that private-sector job creation fell by more than 11,000 per week on average for the four weeks ending October 25, suggesting a potential slowdown in employment growth.
The data contrasted with ADP’s prior report showing gains earlier in the month, hinting at emerging weakness in the broader labor market.
Among stocks, Fermi dropped 12% after posting a third-quarter loss of $0.84 per share and a $347 million net loss.
eToro Group rose 10% after Deutsche Bank upgraded the stock to Buy, citing strong fundamentals and an attractive valuation.
Maplebear (Instacart) gained 7% after BMO upgraded the stock to Outperform, calling it a “best-in-class grocery delivery player.”
Gemini Space Station fell 16% after reporting a wider-than-expected adjusted EBITDA loss of $50.7 million, though revenue topped forecasts.
Paramount Skydance rallied 8% after strong earnings and plans for further cost cuts and streaming price hikes.
Beyond Meat sank 6% on weak fourth-quarter guidance, with expected revenue between $60 million and $65 million, below analyst expectations of $70 million.
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