Nasdaq 100 index pares drop to 0.5%; was down as much as 1.2%

The Nasdaq 100 index pared its losses on Tuesday, closing the session down 0.5% after having fallen as much as 1.2% earlier in the day. The decline was primarily driven by a selloff in artificial intelligence-linked stocks, which had seen significant gains in recent months but faced profit-taking and valuation concerns. The index, which includes many of the largest and most influential technology companies, struggled to maintain earlier gains as investors rotated into more defensive sectors and reconsidered exposure to high-growth names.

The broader S&P 500 also closed lower, down 0.26%, while the Dow Jones Industrial Average bucked the trend, rising 0.17% to 50,872.11. The divergence between the indices highlighted a shift in investor sentiment, with old-economy sectors such as healthcare and utilities outperforming the tech-heavy Nasdaq. The iShares U.S. Healthcare ETF (IYH) rose 0.7%, and the State Street SPDR S&P Bank ETF (KBE) climbed about 1%, contrasting with the nearly 3% drop in the information technology sector.

Meanwhile, European markets closed lower, with the Stoxx 600 down 0.42% as oil prices continued to decline following comments from U.S. Energy Secretary Chris Wright about improved shipping conditions in the Strait of Hormuz. Gold and silver prices also hit their lowest levels of the year, with gold falling 1.76% and silver easing 4.88%.

On the economic front, the U.S. trade deficit fell 49% year-to-date, attributed to the impact of tariffs and reduced imports, while existing home sales for May exceeded expectations, signaling strength in the housing market. Additionally, OpenAI filed confidentially for an IPO, adding to the anticipation surrounding the artificial intelligence sector.