US stocks eased on Tuesday as weakness in major technology names pulled the S&P 500 modestly lower following a strong rally in the previous session.
The S&P 500 fell 0.1%, the Nasdaq Composite declined 0.5%, and the Dow Jones Industrial Average rose 91 points, or 0.2%, supported by gains outside the tech sector.
The pullback came as investors reassessed the durability of Monday’s advance, which had been fueled by optimism that the record US government shutdown may soon come to an end.
Tuesday’s pullback followed broad gains on Monday, when markets rallied on signs that Washington was moving closer to resolving the shutdown.
The Nasdaq Composite posted its strongest session since May 27, rising more than 2%, as investors bought the dip in AI stocks after last week’s sell-off.
The S&P 500 gained 1.5%, and the Dow advanced nearly 400 points.
That momentum softened on Tuesday as investors awaited final House action on the Senate-passed bill, which would fund the government through January.
The compromise does not include an extension of Affordable Care Act subsidies, but requires a separate vote on them in December.
AI trade under pressure as CoreWeave and Nvidia drop
The artificial intelligence trade weakened further after CoreWeave shares plunged 9% on guidance that fell short of investor expectations.
Nvidia also retreated nearly 2% after SoftBank disclosed that it sold its entire Nvidia stake—32.1 million shares in October—for more than $5 billion, adding pressure to one of the market’s most influential AI names.
SoftBank also revealed that it sold part of its T-Mobile position for $9.17 billion.
“We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength,” SoftBank Chief Financial Officer Yoshimitsu Goto said during a presentation.
The declines pushed the Technology Select Sector SPDR Fund (XLK) down 0.6%, reinforcing valuation concerns that have weighed on tech stocks in recent weeks.
New ADP data points to late-October job losses
Investor sentiment dimmed further after new labour data from ADP signalled fresh weakness in the US job market.
For the four weeks ending October 25, private-sector job creation fell by an average of more than 11,000 per week, according to ADP’s preliminary numbers.
The report suggested “the labor market struggled to produce jobs consistently during the second half of the month,” said Nela Richardson, ADP’s chief economist.
The findings contrasted with last week’s ADP report, which showed a 42,000-job increase in October—but those figures only reflected hiring through mid-month.
Economists had expected the official nonfarm payrolls report to show a loss of 60,000 jobs, but the data was not released due to the shutdown.
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