Tech-Heavy Nasdaq Shows Another Significant Move To The Downside

(RTTNews) - Following the weakness seen in the previous session, stocks showed another significant move to the downside during trading on Tuesday. The tech-heavy Nasdaq led the way lower, while the Dow posted a more modest loss.

The major averages all ended the day in negative territory. The Nasdaq plunged 579.56 points or 2.2 percent to 25,587.04, the S&P 500 tumbled 107.33 points or 1.4 percent to 7,365.46 and the Dow edged down 45.87 points or 0.1 percent to 51,666.84.

A sharp pullback by semiconductor stocks weighed on the markets, with the Philadelphia Semiconductor Index plummeting by 7.6 percent after ending the previous session at a record closing high.

Shares of Micron Technology (MU) plunged by 13.2 ahead of the release of the chipmaker's fiscal third quarter results after the close of trading on Wednesday.

Substantial weakness was also visible among computer hardware stocks, as reflected by the 4 percent nosedive by the NYSE Arca Computer Hardware Index.

Outside of the tech sector, gold stocks moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 4.5 percent.

Networking and steel stocks also saw considerable weakness, while pharmaceutical, healthcare and commercial real estate stocks moved to the upside.

Daniela Hathorn, Senior Market Analyst at Capital.com said the Nasdaq is "testing the strength of dip-buying demand that has repeatedly supported the market this year."

"For now, the move looks more like a sentiment-driven correction than a fundamental shift in the AI and earnings narrative, but it highlights how dependent market leadership has become on a relatively small group of growth-focused stories," she added.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan's Nikkei 225 Index plunged by 3.6 percent, while China's Shanghai Composite Index tumbled by 1.4 percent.

Most European stocks also moved to the downside on the day. The German DAX Index slumped by 1 percent, the French CAC 40 Index slid by 0.7 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.

In the bond market, treasuries saw modest strength, regaining ground following yesterday's weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.6 basis points to 4.493 percent.