The losses reflect ongoing concerns about how rapid advances in artificial intelligence could upend long-standing software business models.CrowdStrike fell 2.3%, while Intuit and Adobe each fell more than 2%.
Meanwhile, Nasdaq lagged as Advanced Micro Devices fell 12.2% after the company forecast a slight decline in first-quarter revenue.
The technology index of the S&P 500 was also lower.
But strong gains in Eli Lilly and Super Micro Computer Lenten supported the market. Shares of Super Micro Computer rose 16% after the company raised its annual revenue forecast based on continued demand for its AI-optimized servers as companies ramp up data center capacity. Shares of the drugmaker rose 7% after the company forecast 2026 earnings above Wall Street expectations. GE HealthCare also expects full-year earnings to beat expectations, sending its shares up 3.8%.
The S&P 500’s health care index rose marginally.
“Strong earnings are supporting market valuations and what we have seen is that earnings growth has extended to more sectors than just technology,” said Sean Clark, Chief Investment Officer at Clark Capital.
At 9:42 PM ET, the Dow Jones Industrial Average rose 0.55% to 49,513.23, the S&P 500 rose 0.1% to 6,924.78 and the Nasdaq Composite lost 0.14% to 23,222.
Alphabet rose 0.8% ahead of its results after markets closed, while Amazon fell 0.3% ahead of its Thursday earnings report.
Markets will scrutinize the results of the ‘Magnificent Seven’ looking for evidence that large-scale capital investment plans are delivering the kind of returns that justify their lofty valuations.
The increasingly crowded AI trade has also pushed investors into undervalued small caps and other overlooked corners of the market.
The small-cap S&P 600 index rose 1.2% on the day, while the Russell 2000 was on track for a weekly gain of more than 1%, compared with a modest decline for the S&P 500.
“We’ve seen a leadership shift from large-cap growth technology companies to other sectors, such as small caps, that have taken on leadership roles. Technology and large-cap growth stocks are taking a bit of a backseat,” Clark added.
Uber shares fell 4.1% on forecasts that first-quarter adjusted earnings would be below expectations.
Chipotle Mexican Grill fell 1.3% after the burrito chain said it expects to increase menu prices this year, while margins are expected to remain pressured as diners eat out less.
SHUTDOWN ENDS, DATA AWAIT
US President Donald Trump signed a spending deal into law on Tuesday, ending the partial government shutdown that had hampered the release of key labor market data this week.
The government is now expected to announce when key non-farm payrolls and JOLTS data will be released. Absent this, markets would have to rely on private data providers.
U.S. private labor costs rose less than expected in January, the ADP national employment report showed.
S&P Global’s final composite PMI figures are expected shortly after markets open.
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