Nvidia plummets, Wall Street becomes highly polarized.

Nvidia shares plunged the most since last spring, dragging down the Nasdaq and S&P 500 on February 26, even though most Wall Street stocks rose. This development suggests investors are beginning to reassess expectations for the artificial intelligence (AI) wave.

Investors closely watched market developments on Wall Street as Nvidia shares plunged, dragging down technology stocks and the Nasdaq index during trading on February 26.

Trading on February 26th (US time) closed with a clear divergence on Wall Street, as selling pressure was concentrated on technology stocks, particularly Nvidia, causing major indices to move in opposite directions. Amidst the ongoing earnings season, which still sees many positive results, investor sentiment became more cautious as they reassessed the growth prospects of the AI ​​wave.

At the close of trading, the S&P 500 fell 37.27 points, or 0.5%, to 6,908.86; the Nasdaq Composite, a major technology stock index, saw the sharpest decline, losing 273.69 points, or 1.2%, to 22,878.38; conversely, the Dow Jones Industrial Average remained relatively unchanged but still rose slightly by 17.05 points to 49,499.20. Meanwhile, the Russell 2000, representing small-cap companies, rose 0.5% to 2,677.29.

The mixed performance, with both green and red movements, clearly shows a shift in capital flows between sectors. While high-growth technology stocks faced downward pressure, many traditional sectors and small-scale businesses attracted buying interest, reflecting investors' portfolio rebalancing trend after the initial surge at the beginning of the year.

The focus of the trading session was on Nvidia stock, a company considered a symbol of the global AI craze. Despite the company reporting better-than-expected earnings with continued impressive revenue and growth prospects, the stock still fell sharply, recording its worst trading day since April last year.

This paradox shows that market expectations for Nvidia have been pushed very high. The excellent business results that were once enough to drive a sharp increase in stock price are no longer surprising. When actual results only meet or slightly exceed forecasts, investors quickly take profits after the previous long rally.

According to analysts, the negative market reaction reflects growing concerns about the speed of return on investment in the AI ​​investment race. Technology corporations are spending heavily to expand their AI infrastructure and ecosystems, while short-term financial benefits for shareholders are not yet commensurate.

Nvidia's decline quickly spread to semiconductor stocks, dragging the Nasdaq to become the biggest loser of the session. Conversely, some software stocks that had been pressured by concerns that AI would render their business models obsolete rose, indicating a shift in capital towards more stable sectors.

Experts believe the market is currently entering a technical correction phase after two previous strong upward sessions. Investors are taking advantage of the rally to take profits in leading stocks, while simultaneously seeking opportunities in sectors with more attractive valuations.

The developments on February 26th also reflected a shift in market sentiment: from an "AI euphoria" to a "selective opportunity" phase. Instead of betting on long-term growth expectations, investors began to focus more on the ability to generate real cash flow and sustainable business performance.

Besides corporate factors, the global macroeconomic context also contributed to cautious trading. Investors continued to monitor interest rate prospects, currency fluctuations, and policy signals from major central banks. Expectations of monetary policy adjustments in Japan, along with the volatility of the US dollar, increased caution in international financial markets.

Furthermore, following a strong rally since the beginning of the year, many investment funds are restructuring their portfolios before the start of the new trading month, thereby increasing short-term correction pressure on stocks that have risen sharply, especially in the technology sector.

Nevertheless, experts remain positive about the medium-term trend of the US market. Since the beginning of the year, the Dow Jones has risen by about 3%, the S&P 500 by nearly 1%, while small-cap stocks have increased by almost 8%. This indicates that money has not left the market but is simply circulating between sectors.

Analysts believe the correction in technology stocks is a necessary step to bring valuations back to more reasonable levels after a period of strong gains driven by AI expectations. A healthy correction could help the market build a more solid foundation for the next growth cycle.

In the short term, Wall Street's performance is expected to depend on three main factors: the earnings outlook for technology companies, the monetary policy direction of the US Federal Reserve (Fed), and the sustainability of the global AI investment cycle.

The trading session on February 26th therefore serves as a reminder that even during periods of strong market growth, leading stocks can still experience significant volatility as expectations shift. Wall Street is gradually moving from euphoria to a more cautious and selective approach, a sign that the market is entering a more mature and sustainable phase of the new financial cycle.

Source: https://thoibaonganhang.vn/nvidia-lao-doc-pho-wall-phan-hoa-manh-178189.html