U.S. equities moved lower on Wednesday as selling pressure intensified across technology stocks, dragging major indexes down. Weakness in semiconductors, led by a sharp drop in Advanced Micro Devices, reinforced a broader risk-off mood in markets already grappling with rotation away from high growth technology names.
Market Performance Overview
The S&P 500 fell 0.9%, while the Dow Jones Industrial Average slipped 50 points, or 0.1%. The tech-heavy Nasdaq Composite dropped 2%, reflecting concentrated losses in large technology and chip stocks.
Risk appetite weakened further as bitcoin declined 3% after briefly falling below the $73,000 level.
Semiconductor Stocks Under Pressure
Shares of AMD plunged 16% after the company issued a first quarter forecast that disappointed some analysts. Defending the outlook, CEO Lisa Su said demand has accelerated in recent months, noting that artificial intelligence adoption is progressing faster than anticipated.
Other chipmakers also posted steep losses. Broadcom fell 6%, while Micron Technology dropped 12%, extending a broader pullback across AI related hardware names.
Software Stocks and Select Stability
Software stocks remained under pressure as well. Oracle slid 6%, and CrowdStrike lost more than 2%, continuing declines from the prior session.
Some large technology companies showed relative resilience. Microsoft gained 1%, suggesting investors are becoming more selective within the artificial intelligence trade.
Scott Welch, chief investment officer at Certuity, said the market has increasingly differentiated between perceived winners and losers in the AI space, a trend that began late last year and appears to be continuing.
Rotation Into Value and Cyclical Names
Within the Dow, gains in non technology stocks helped limit losses. Amgen surged 7% after reporting better than expected fourth quarter earnings and revenue. Honeywell rose more than 1% as investors rotated toward value oriented and cyclical sectors.
Welch described the move as a natural rotation after an extended period of dominance by large cap growth stocks, noting that value stocks, small caps, and non U.S. markets had lagged despite strong performance last year.
Economic Data Adds to Caution
Adding to market unease, ADP reported that private payrolls increased by just 22,000 in January, well below the 45,000 gain expected by economists surveyed by Dow Jones.
The data typically precedes the official nonfarm payrolls report from the Bureau of Labor Statistics, which will be delayed this week due to the recent partial government shutdown. The shutdown ended Tuesday after President Donald Trump signed a funding bill into law.
Looking Ahead
Investors are now focused on upcoming earnings from Alphabet, due after the market close Wednesday, with results from fellow mega cap technology firm Amazon expected Thursday. These reports may help determine whether the technology sector’s pullback deepens or stabilizes in the days ahead.
Conclusion
Wednesday’s market decline highlights growing investor caution toward technology and AI driven stocks after an extended rally. As earnings season continues and economic data softens, markets appear to be entering a phase of sharper differentiation and sector rotation, with volatility likely to persist.
