Nasdaq falls as tech shares come under pressure again; S&P 500 is little changed

The Nasdaq Composite fell on Tuesday, pressured by declines in tech, following strong gains in the previous session.

The tech-heavy index lost 0.5%, while the S&P 500 hovered around the flatline. The Dow Jones Industrial Average outperformed, rising 359 points, or 0.8%.

CoreWeave was among the laggards of the session. Shares slid 13% after the company’s guidance disappointed investors, hurting the artificial intelligence trade. Shares of AI chip darling Nvidia also pulled back 3% after SoftBank sold its entire stake in the chipmaker for more than $5 billion.

The AI trade has been under pressure recently amid growing valuation concerns. On Tuesday, key names in the play, such as Micron Technology, Oracle and Palantir Technologies, moved lower in sympathy with CoreWeave and Nvidia. Micron and Oracle each declined 4%, while Palantir pulled back 3%.The Technology Select Sector SPDR fund (XLK), which tracks the S&P 500 tech sector, was also down about 1%.

“These tech companies, they’re cash flow machines,” Bill Fitzpatrick, managing director at Logan Capital Management, said in an interview with CNBC. “They’re terrific companies, but the starting point does matter, and given where they’re valued today, it doesn’t take much – a little bit of a negative news – for the sentiment to turn just a little bit and you get an unwind that is that is more favorable to value equities.”