Wall Street worries continue as Dow Jones falls over 400 points from highs
Benchmark indices on Wall Street continued to remain volatile as worries with regards to trade wars kept investor sentiment in check. The Dow Jones fell over 400 points from the day’s high to end 200 points lower. The S&P 500 just about managed to end above the flat line to snap a four-day losing streak on paper. The Nasdaq outperformed with a 0.3% advance ahead of Nvidia’s results, which were reported after the bell.
Nvidia shares gave up gains in extended trading despite a 78% revenue growth and upbeat guidance with regards to its Blackwell chips in 2025.
Traders processed a barrage of statements from President Donald Trump on trade policy. Bonds climbed after a solid $44 billion auction of seven-year notes. The yield on 10-year Treasuries fell four basis points to 4.25%. The dollar rose 0.1%.
The dominance of big tech made life miserable for stock pickers in recent years. With the group reaching a double-digit drop from its peak, opportunities to uncover the next market vanguards have arisen, says Morgan Stanley’s Lisa Shalett.
Shalett sees “money to be made” in owning standouts within financial services, domestic industrials, energy and materials mining companies, as well as consumer services like media and entertainment. She also likes health care, one of last year’s worst laggards, pointing to interesting generative AI applications for the sector.
That under-allocation is turning out to be a blessing in disguise. With the so-called Magnificent Seven faltering this year, active investors’ are seeing a performance boost: Roughly 49% of actively managed mutual funds and exchange-traded funds that compare themselves to the S&P 500 are beating the index in 2025, according to Morningstar Direct. That’s up from 38% during the same time last year and far above the 17% outperformance level of the last decade.
US stock gains are likely to continue broadening beyond the technology sector, according to Savita Subramanian at Bank of America Corp.
“There are a lot of attractive opportunities within the S&P 500 that may not be the Magnificent Seven,” the strategist told Bloomberg Television. “The theme is not necessarily ‘rest of world over US,’ but broadening trends outside of just mega cap tech.”
(With Inputs From Agencies.)