US stocks sold off broadly Thursday as Wall Street continued to shed tech stocks.
The Dow fell 554 points, or 1.3%, retreating from a record high reached a day ago. The S&P 500 fell 1.1%. The Nasdaq Composite fell 1.2%, extending its losses after logging its worst day since 2022 on Wednesday.
“A correction was overdue and no one will be surprised if the market regains its momentum by the end of earnings season,” wrote Louis Navellier, chairman of Navellier & Associates, in a Thursday note.
Investors have this week moved out of the Magnificent Seven tech stocks that powered the market to repeated record highs this year. The shift comes after cooling inflation data and stronger-than-expected retail sales data bolstered expectations that the Federal Reserve will begin cutting sky-high interest rates as soon as September.
Shares of smaller companies that tend to do well in a lower-rate environment began rallying last week, helping the Dow reach fresh highs. But small-cap stocks have pared back their gains in recent sessions: The Russell 2000, which tracks the performance of US small caps, fell 1.9% on Thursday.
Shares of Nvidia, Microsoft, Meta Platforms, Amazon, Apple and Alphabet are on pace to close the week lower, while Tesla is on track to end slightly higher.
Tech stocks also took a hit this week after Bloomberg reported Tuesday that the Biden administration is mulling plans to impose more sanctions on Chinese tech firms and to heighten semiconductor trade restrictions between the US and China.
This is a developing story and will be updated.
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