Tech Stocks Swoon to Halt Wall Street’s Rebound: Markets Wrap

(Bloomberg) — A selloff in Wall Street’s largest technology companies dragged down the stock market, with investors also gearing up for Wednesday’s Federal Reserve decision that will likely bring an assessment of how President Donald Trump’s trade policies are impacting the economy.

Equities halted a back-to-back rally from technically oversold levels. The cohort of tech megacaps dubbed “Magnificent Seven” hit the lowest since September, with Tesla Inc. down 5% Nvidia Corp. falling 3% in the run-up to chief Jensen Huang’s keynote speech. Short-term Treasuries outperformed. German bonds slipped ahead of a vote to unleash spending. Gold hit a record high amid renewed Mideast tensions.

Just about a month ago, tech giants were making new highs as investors piled into the stocks on expectations that Trump administration policies would stoke economic growth and bring regulatory relief. Those assumptions may now be under threat if the economy slows and big bets on artificial intelligence don’t pay off as expected.

“Because investors’ favorite stocks (and those with a heavy weighting in the index) have suffered so much, it’s likely impacting investor sentiment disproportionately,” said Bret Kenwell at eToro. “Historically, similar levels in sentiment have coincided with at least a short-term bottom in US stocks, although it’s not clear that we’ve seen a capitulatory type move that generally marks the bottom.”

With Fed officials expected to hold rates steady on Wednesday, the market will focus on officials’ updated economic projections and Chair Jerome Powell’s press conference for clues about the path ahead. For now, policymakers have signaled they’re in a wait-and-see mode as they seek further progress on inflation and greater clarity on the economic impact of Trump’s policies.

“The ongoing trade tensions and tariff implementations under President Trump’s administration have introduced significant uncertainty,” said Jay Woods at Freedom Capital Markets. “Investors are eager to understand how these policies are influencing the Fed’s economic outlook, especially concerning inflation and growth projections.”

The S&P 500 fell 1%. The Nasdaq 100 slid 1.7%. The Dow Jones Industrial Average lost 0.5%. A gauge of the Magnificent Seven megacaps slipped 3%. The Russell 2000 dropped 0.8%.

The yield on 10-year Treasuries was little changed at 4.31%. The Bloomberg Dollar Spot Index rose 0.1%.

Treasury Secretary Scott Bessent said that the underlying economy is healthy and there’s no reason for the US to see a recession, while rejecting the idea of assuring there cannot be a downturn.

“I can’t guarantee anything,” Bessent said in an interview Tuesday with Fox Business’ Maria Bartiromo, dismissing any question about assuring there won’t be one as “silly.”

Investors have slashed holdings of US equities by the most on record, according to Bank of America Corp.’s latest survey. Fund managers reported being about 23% underweight in US stocks — a plunge of 40 percentage points from the previous tally.

“Peak US exceptionalism is reflected in record rotation out of US stocks,” strategist Michael Hartnett wrote in a note.

Even after the 10% correction in US large caps, earnings expectations embedded in stock prices are extremely high — at levels achieved only four times since the tech bubble 25 years ago — and may remain a challenge to equities, according to Gina Martin Adams and Michael Casper at Bloomberg Intelligence.

“Consensus has taken down estimates for the first half but is still holding onto forecasts for a robust second-half recovery that doesn’t appear likely without a major near-term change at the Federal Reserve or with taxes,” they said.

While stocks were getting hammered into a brief correction last week, driving the S&P 500 Index to erase some $5 trillion in equity value, corporate insiders returned to buy the dip. 

A gauge of insider sentiment from the Washington Service shows that with two more weeks to go in March, the ratio of buyers to sellers rose to 0.46, up from 0.31 in January. That puts the measure on pace for the highest monthly reading since June.

Corporate Highlights:

• Google parent Alphabet Inc. agreed to acquire cybersecurity firm Wiz Inc. for $32 billion in cash, reaching a deal less than a year after initial negotiations fell part because the cloud-computing startup wanted to stay independent.
• Apple Inc. lost its fight at Germany’s top civil court to overturn a regulator’s decision to put it under tighter antitrust scrutiny alongside other US tech giants.
• Sarepta Therapeutics Inc. shares slumped Tuesday after the company said a young man treated with its gene therapy died of acute liver failure.
• Grab Holdings Ltd. is moving forward with its attempt to take over GoTo Group, according to people familiar with the matter, who said the Singaporean ride and delivery firm has begun due diligence on its Indonesian rival.

Key events this week:

• Bank of Japan rate decision, Wednesday
• Federal Reserve rate decision, Wednesday
• China loan prime rates, Thursday
• Bank of England rate decision, Thursday
• US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
• Eurozone consumer confidence, Friday
• Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 1% as of 10:32 a.m. New York time
• The Nasdaq 100 fell 1.7%
• The Dow Jones Industrial Average fell 0.5%
• The Stoxx Europe 600 rose 0.5%
• The MSCI World Index fell 0.7%
• Bloomberg Magnificent 7 Total Return Index fell 3%
• The Russell 2000 Index fell 0.8%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was little changed at $1.0916
• The British pound fell 0.1% to $1.2973
• The Japanese yen fell 0.2% to 149.54 per dollar

Cryptocurrencies

• Bitcoin fell 2.9% to $81,555.48
• Ether fell 2.5% to $1,886.93

Bonds

• The yield on 10-year Treasuries was little changed at 4.30%
• Germany’s 10-year yield was little changed at 2.83%
• Britain’s 10-year yield advanced two basis points to 4.66%

Commodities

• West Texas Intermediate crude rose 0.2% to $67.71 a barrel
• Spot gold rose 0.9% to $3,028.27 an ounce

–With assistance from Sujata Rao, Allegra Catelli, John Viljoen and Aya Wagatsuma.

©2025 Bloomberg L.P.