Tech Rotation Deepens as Growth Plays Gain Favor, Bitcoin Slides – US Market Wrap
US investors continued rotating away from technology heavyweights — long favored for their steady earnings in uncertain times — and toward a broader set of stocks tied more closely to improving economic growth. Bitcoin fell sharply.
Stocks trimmed earlier losses after signs that nuclear negotiations between the US and Iran were still progressing, following reports they had briefly stalled. The S&P 500 finished modestly lower, though most of its constituents advanced. The Nasdaq 100 dropped 1.8%, weighed down by renewed selling in software companies and even steeper declines among chipmakers. After the close, Alphabet slid after forecasting spending that exceeded expectations.
The shift out of megacap technology and into small caps and value-oriented stocks has gathered pace as investors position for stronger growth in 2026. Evidence of broadening participation was seen in the equal-weighted S&P 500, where large and smaller companies carry the same influence, which climbed 0.9%.
The rotation proved especially punishing for momentum-driven strategies. Assets tied to stocks with strong recent performance suffered sharp declines, underscoring how quickly leadership is changing as investors reassess positioning.
The S&P 500 fell 0.5%. The Nasdaq 100 suffered its worst two-day decline since October and slipped below its 100-day moving average. A software-sector exchange-traded fund dropped 1.8%, while a chipmaker index tumbled 4.4%.
Bitcoin hovered near $73,000, with derivatives markets increasingly pricing in further downside. The yield on 10-year US Treasuries rose one basis point to 4.28%, and the dollar gained 0.3%.
