On August 12, 2025, a trader was busy on the floor of the New York Stock Exchange (NYSE).
The S&P 500 experienced a downturn on Tuesday, primarily driven by a significant drop in Nvidia’s stock along with other tech stocks.
The S&P 500 fell by 0.59%, closing at 6,411.37. The Nasdaq Composite dropped 1.46%, finishing at 21,314.95. In contrast, the Dow Jones Industrial Average gained 10.45 points (0.02%), ending at 44,922.27, even reaching new highs during the day, thanks in part to companies like Home Depot.
Shares of major tech and chip manufacturers saw declines. For instance, Nvidia’s stock slipped by 3.5%, while Advanced Micro Devices and Broadcom dropped by 5.4% and 3.6%, respectively. Notably, software stocks like Palantir fell over 9%, marking the worst performance within the S&P 500. Other big names in technology, including Tesla, Meta Platforms, and Netflix, also faced pressure.
One expert noted, “The AI trade might not be finished, but it seems to be pausing. After an impressive 40% rise in the NASDAQ since April, some stalling is normal as the market adjusts to new economic data and anticipated Fed policies.”
They further added, “Shifts in capital towards companies demonstrating the ability to effectively utilize AI for better margins and efficiency could foster more sustainable growth, though short-term fluctuations are likely.”
Meanwhile, Home Depot’s shares saw a 3% increase as the home improvement giant upheld its full-year forecast. Despite second-quarter revenues falling short of expectations, investors are now eagerly anticipating upcoming reports from Lowe’s, Walmart, and Target, which could provide insights into consumer behaviors amid inflation trends and evolving US trade policies.
Wall Street is also awaiting updates from Federal Reserve Chair Jerome Powell regarding future central bank policy meetings. This week, central bank officials from around the globe will gather in Jackson Hole, Wyoming for the Fed’s Annual Economic Symposium.
The Fed Funds Futures Market indicates an 85% likelihood of a 0.25% decrease in rates during the Fed’s next meeting in September. One expert commented, “Powell’s speech on Friday may be crucial for the market as he hints at possible rate cuts at the September meeting.”
Looking ahead to the latter half of 2025, there might even be potential for growth as investors start incorporating estimates for 2026 revenues.
