Stocks finished mixed as a chip selloff dragged tech: Tuesday recap

The Dow pulled away from the rest of the market on Tuesday. It rose 1.08% to 52,747.32, while the S&P 500 added a narrower 0.24% to 7,428.78. The tech-heavy Nasdaq-100 went the other way, falling 0.97%, and the Nasdaq Composite closed at 24,876.91. Small caps barely moved: the Russell 2000 edged up 0.16%.

The split ran straight through the sector board. Health care led, up 2.36%, with consumer staples close behind at 1.99%, the kind of defensive pairing that tends to outrun the market on cautious days. Materials, communication services and financials also finished higher, each between 1% and 2%. Technology sat at the bottom, off 1.84%. Energy was the next-weakest group, down 1.35%, and utilities and industrials ended slightly lower. Seven of the eleven S&P 500 sectors rose, yet the index gained only 0.24%; technology’s heavy weighting pulled hard against the day’s broad advance.

A global selloff in semiconductors set the tone. Chip stocks slid for a fourth straight session, and shares of lithography-equipment maker ASML dropped about 5% after a report, which the company has not confirmed, that a Chinese firm is building an advanced immersion lithography machine of the kind ASML has long dominated. The selling in chips, paired with buying in health care and staples, came as the Federal Reserve opened a two-day policy meeting. A rate decision is due Wednesday, and most economists expect officials to leave the federal funds target range unchanged.

The rotation has been building for a week. Over the past five sessions the Nasdaq-100 has fallen 4.72% while the Dow gained 1.03%, a gap that speaks to money leaving the biggest technology names and finding its way into steadier corners of the market. Technology has been the worst sector over that stretch, down 5.36%, against a 4.37% climb for health care. The broad S&P 500 sits close to where it started the week.

Under the surface, Tuesday looked calmer than a 1.84% technology decline suggests. The Russell 2000’s small gain kept smaller companies close to the large-cap tape, a sign the selling stayed concentrated in one corner of the market. The VIX, Wall Street’s volatility gauge, slipped to 18.21. The 10-year Treasury yield eased to 4.69%. Neither reading pointed to broad stress; both looked like a market repositioning rather than one bracing for trouble. For a session built around a sharp drop in the market’s most heavily weighted stocks, the backdrop stayed orderly.

The week’s calendar does the rest of the talking. The Fed’s decision and the Chair’s press conference come Wednesday afternoon, and several of the largest technology companies report quarterly results before the week is out. With chipmakers already under pressure, those earnings arrive at a delicate moment. Given the size of the companies reporting, their reactions can move the major indexes on their own. Both the rate decision and the results land on a market that spent Tuesday sorting its winners and losers by sector.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.