Stocks of former market leaders like Nvidia and Tesla are dragging Wall Street lower on Wednesday. By afternoon trading, the S&P 500 was down by 0.8%. The Dow Jones Industrial Average, which had earlier gained 230 points, slipped into a loss, down 28 points, or 0.1%, by 12:49 p.m. Eastern. The Nasdaq composite, heavily impacted by Big Tech, was heading for a larger drop of 1.6%.
The drop is largely attributed to the “Magnificent Seven” — a group of dominant tech stocks that have been central to recent declines in the U.S. stock market. Earlier this month, the S&P 500 experienced a 10% drop, marking its first “correction” since 2023. Big Tech stocks had soared in previous years, fueled by excitement around artificial intelligence (AI) technology, but their prices, critics argued, became inflated as they outpaced even their rapidly increasing profits.
Nvidia saw a 5.7% drop, bringing its loss for the year to 15.3%, making it the largest contributor to the S&P 500’s decline. Other AI-focused companies also saw declines, including Super Micro Computer, which fell 7.3%, and power companies working to support vast AI data centers.
Tesla is facing additional difficulties, including concerns that political backlash against its CEO, Elon Musk, could impact the company’s electric vehicle sales. As a result, Tesla’s stock fell by 5.6%, bringing its loss for 2025 to 32.6%.
The U.S. stock market has stabilized somewhat since its recent correction, with the S&P 500 now sitting about 7% below its record high. However, strategists on Wall Street caution that the market’s volatility is likely to continue, especially with a new set of U.S. tariffs expected to take effect next month. Even if these tariffs don’t harm the global economy as much as anticipated, the ongoing discussions around them have already eroded confidence among U.S. consumers and businesses.
Despite the dampened sentiment, the economy and job market appear to remain strong. Economists are closely monitoring whether the drop in confidence will eventually result in tangible economic setbacks. Another report released Wednesday morning offered little new insight.
Orders for durable goods like machinery and airplanes unexpectedly increased last month, defying economists’ predictions of a decline. However, a key subset of the data, which excludes aircraft and defense items and serves as an indicator of business investment, shifted from growth to contraction. This may suggest that businesses are holding back on spending as they await clarity on the impact of tariffs.
Treasury yields, which often reflect expectations about the U.S. economy’s performance, fluctuated after the report. The yield on the 10-year Treasury rose to 4.34%, up from 4.31% the previous day.
On Wall Street, GameStop saw a 16.2% surge after reporting better-than-expected quarterly results. The company also announced plans to invest part of its treasury in bitcoin.
Dollar Tree’s stock rose 4.5% after it revealed it would sell Family Dollar to two private equity firms for $1 billion, following a decade of struggles to integrate the bargain chain. The company also reported stronger-than-expected profits for the latest quarter.
Cintas saw a 6.7% increase in its stock price after the company, which provides work uniforms, restroom supplies, and other equipment, reported higher-than-expected profits for the most recent quarter.
Across global stock markets, indexes showed mixed results in both Europe and Asia. In London, the FTSE 100 rose by 0.3% following a report indicating that U.K. inflation had improved slightly more than anticipated by economists.