Nasdaq Sinks as Tech Stocks Tumble Amid Rising Rate Concerns

The Nasdaq fell due to declines in major technology stocks as interest rates and hyperscaler spending concerns loomed. Despite losses in Big Tech, gains in sectors like industrials helped lift the S&P 500 and Dow. Investors remain on edge with the potential for further Federal Reserve rate hikes amid rising inflation.

The Nasdaq experienced a downturn on Thursday, led by losses in Big Tech shares, as the S&P 500 and Dow Jones climbed due to gains in other sectors.

Technology stocks weighed heavily on the Nasdaq, with concerns over hyperscaler spending and anticipated higher interest rates overshadowing positive signals from companies like Micron and Qualcomm regarding AI demand. Apple dropped nearly 5% after implementing price increases for iPads and MacBooks to counter steep memory and storage chip costs. Meanwhile, Nvidia, Microsoft, and Alphabet shares fell between 1.2% and 2.7%.

The market witnessed a broader downturn driven by fears surrounding debt-financed hyperscaler expenditures and a potentially more aggressive Federal Reserve. 'There comes a point when stocks don't continue to rise indefinitely,' remarked Robert Conzo, CEO of Wealth Alliance, reflecting on the tech sell-off.

Mixed fortunes were observed with Micron soaring 14% and Qualcomm rising 5%. Other memory chip manufacturers, including Sandisk, Western Digital, and Seagate Technology, saw gains as well. Industrial players like Caterpillar and Goldman Sachs assisted in pushing the Dow higher. Healthcare and industrial sectors showcased notable upward movements within the S&P 500.

At midday ET, the Dow Jones gained over 436 points, the S&P 500 was minimally up, and the Nasdaq Composite recorded a decline. The Philadelphia SE Semiconductor index outperformed expectations this quarter, despite the tech sector's minor dip.

Pressure mounted on software stocks like Atlassian and Applovin, each experiencing significant declines. The Nasdaq is on track for its steepest monthly decline since March 2025, with chip indices reflecting a downturn in light of regional conflicts.

Data revealed a rise in U.S. inflation above 4% due to increasing energy prices, potentially pushing the Federal Reserve towards higher interest rates, anticipated by traders to rise by at least 25 basis points by year-end. Michele Morganti of Generali Investments noted U.S. equities' capacity to handle prospective rate increases.

The U.S. economy grew faster than previously estimated at 2.1% in the first quarter, while jobless claims fell unexpectedly. Key remarks from Fed officials John Williams and Austan Goolsbee are awaited.

Bio-Techne Corp surged following an acquisition deal with Merck KGaA. Advancing issues outpaced decliners on major indices.

The S&P 500 and Nasdaq recorded numerous new 52-week highs and lows.