Tech Slumps While 300-Plus S&P 500 Stocks Rise: A Market Split in Two

More than 300 stocks in the S&P 500 rose on Thursday — even as tech shares slumped and money rushed into U.S. government bonds, sending Treasury yields sharply lower. MarketWatch editor in chief Mark DeCambre calls it a market "increasingly splintering," and asks whether it signals another violent reset of the AI trade, a broader reshuffling, or both.

Is the AI trade resetting — or rotating?

DeCambre writes: "We've seen this movie before. The difference this time around: Investors weren't just selling tech shares." The breadth matters. When hundreds of stocks climb while the sector that has led the rally for two years falls, money is moving rather than leaving.

Joseph Adinolfi describes the market as behaving like a seesaw, with AI stocks on one side and everything else on the other. The back-and-forth, he writes, is leaving some investors with whiplash.

Jamie Chisholm reports that the latest slide triggered a rare trading signal — one that has now occurred for only the second time since 1999. The last occurrence produced an immediate bounce, but it was followed by more trouble for stocks.

Why did Moderna plunge on good news?

A clinical trial for a potentially groundbreaking cancer vaccine from Moderna and Merck hit its targets. Moderna's stock still plunged after the results leaked. Jaimy Lee writes that the question is whether this was a classic "sell the news" event, or whether investors have other concerns. More details may come when the study is formally presented Saturday at a medical conference.

Where else is money moving?

Several other MarketWatch stories this week point in the same direction: investors lowering risk rather than chasing reward.

• Investors' recent money moves show a preference for lowering risks over boosting rewards, one cited analysis finds.
• Young investors are betting on prediction markets and crypto, though a bestselling author argues boring money moves still work.
• One hot AI-fueled stock, in a rut despite beating earnings expectations by 36%, shows the trade's seams.

What is oil telling us?

Oil prices are nearing their highs for the year as worries grow that armed hostilities in the Iran war could flare up again, write Myra Saefong and Isabel Wang. Tanker rates around the Strait of Hormuz have surged, with shipping costs now five times their pre-war level.

Are younger Americans giving up car ownership?

The share of U.S. households under 35 that own a vehicle has fallen to 79.4%, from 82.1% in 2019, writes Venessa Wong. For some, dropping a car is not just about cutting one bill. It frees up money for rent, savings and everything else.

What else is on the radar?

• France is getting its credit rating reviewed; French debt turmoil has helped turn U.S. Treasury yields around.
• SpaceX's mobile ambitions hit telecom stocks again.
• Americans are having fewer babies — and pampering them with luxury diapers.
• Dollar Signs columnist Aditi Shrikant walks through what to ask before buying a bargain wedding band online, as couples spend less on rings.

The Moneyist, meanwhile, fielded a reader worried that her aging father-in-law — who sold his house to pay off a daughter's $50,000 debt — will run out of money and need financial assistance himself. "Nothing has been set aside," the reader wrote, in a situation the columnist says has raised red flags.

The larger question for investors: if 300-plus gainers and falling yields become the pattern rather than a one-day oddity, the rotation out of AI and into everything else may already be underway.