Not all tech is under fire in Monday's selling, while investors seek refuge in defensive stocks
Every weekday, the Investing Club releases the Homestretch; an actionable afternoon update just in time for the last hour of trading.
TL;DR
- S&P 500 and Nasdaq initially fell due to AI safety concerns but later rebounded.
- A bond market rally, with 10-year Treasury yields falling from over 5%, helped ignite a stock market recovery.
- AI infrastructure stocks led the decline following calls for a slowdown in AI model advancement.
- Cybersecurity and hyperscaler stocks (Meta, Alphabet, Microsoft) rallied on the prospect of reduced capital expenditure.
- Defensive stocks (Johnson & Johnson, Eli Lilly, Kimberly-Clark, Costco) gained favor as investors rotated away from tech.
- CrowdStrike and Palo Alto Networks performed well, with shares up around 14% each.
- Inflation worries persisted, with market odds for a Fed rate hike over 92% ahead of the September meeting.