Tech stocks were down today due to a combination of factors:
- Sector Rotation: Investors rotated out of the tech sector into sectors such as transportation and industrial stocks, which are expected to gain more from the recently passed tax-and-spending bill. This shift reduced demand for tech stocks, leading to a decline in their value12
- Tesla's Performance: Tesla, a major player in the tech sector, saw its shares drop nearly 5% as CEO Elon Musk criticized the tax-and-spending bill and announced plans to form a new political party. This condemnation led to concerns among investors about potential changes to electric-car subsidies and the risks associated with political activism. Musk's comments also drew a response from President Trump, who suggested he could review Tesla's government contracts12
- AI Sector Concerns: Shares of companies heavily involved in artificial intelligence, such as Nvidia, Palantir Technologies, and Advanced Micro Devices, fell sharply. While there is optimism about the long-term gains driven by AI, there are still near-term risks that have caused some investors to become more cautious2.
In summary, the decline in tech stocks today was likely a result of a combination of sector rotation, negative developments specific to key tech companies like Tesla, and concerns about the future of AI-related investments.
7/1/2025 11:45pm
