Profit-Taking Hits Big Tech, US Stocks Weaken
US stocks opened lower on Thursday after the "AI trade" rally triggered profit-taking in major technology stocks. This pressure held back the index's progress, although some other sectors actually rallied sharply.
Early in trading, the Nasdaq 100 was under pressure and reversed its decline after three days of gains, while the S&P 500 also fell slightly. Market focus was split: technology stocks corrected due to profit-taking, but defense stocks surged after President Donald Trump hinted at a major military spending push—including a proposed $1.5 trillion budget by 2027.
This rotation was evident in US defense stocks, which rallied as expectations of increased government contracts and spending increased. Heated geopolitical sentiment—including the Venezuelan issue and the Greenland crisis—also increased the interest in defensive sectors.
In the bond market, the global rally was briefly halted. The 10-year Treasury yield rose again after labor data showed relatively resilient conditions: weekly jobless claims edged up to 208,000, while corporate layoff plans (Challenger) fell to 35,553—the lowest since July 2024.
The market is now holding its breath awaiting Friday's US payrolls (NFP) data, which will determine the Fed's interest rate expectations for the coming months. For now, the "hold on, wait for the data" scenario remains dominant: the chance of a rate cut in the near term is high, but the market remains locked in the possibility of a rate cut in the second half of the year.
Source: Newsmaker.id
