Closing Bell: Risk-Off Takes Hold as Tech De Risking and Geopolitics Jolt Volatility

Key Points

• Investors shifted away from higher‑multiple tech stocks towards defensive and cyclical sectors.
• Broader tech weakness contrasted with PLTR, which extended gains on strong U.S. commercial traction.

U.S. equities traded broadly lower, with a clear rotation toward defensive and real‑economy exposures as investors pared back higher‑multiple technology and shifted toward stability. Transports, Utilities, Consumer Staples, Materials, and Energy led the tape, supported by higher crude oil, while Technology lagged ahead of a packed earnings and data calendar. The Nasdaq underperformed; the S&P 500 weakened under the weight of large‑cap declines, while the Dow held up better thanks to defensive leadership. Cross‑asset signals were calm but cautious: the dollar slipped slightly, long‑end yields edged lower, volatility ticked up, and crypto softened.

Rotation Toward Defense and Real Assets Gains Momentum

Leadership skewed decisively toward sectors with strong cash‑flow visibility and pricing power. Transports rallied on firm demand signals, while Utilities and Consumer Staples drew steady bids as bond‑proxy sectors. Materials and Energy advanced alongside higher oil.

Amid a Tech Pause, Palantir Pulls Ahead

Technology broadly cooled as traders reduced risk ahead of major earnings reports. The clear exception was Palantir (PLTR), which extended gains following its results. Confidence in U.S. commercial momentum, ongoing AIP adoption, and operating leverage reinforced the view that selective AI beneficiaries can continue to perform even as the broader tech complex digests elevated valuations.

Macro Crosscurrents Push Markets Toward Defense

The U.S. dollar eased slightly, helping commodities regain traction. Gold, silver, and copper all finished higher, supported by hedging demand and a softer dollar. Bitcoin moved lower, reflecting incremental risk‑trimming. In rates, a defensive bid for long‑duration bonds nudged the 10‑year yield fractionally lower, while the VIX rose modestly—signaling caution without overt stress. Taken together, the backdrop favored defensives and materials over high‑beta growth.

Market Events for Tomorrow

• 08:15 AM ET: ADP Non-Farm Employment Change
• 09:45 AM ET: Final Services PMI      
• 10:00 AM ET: ISM Services PMI
• 10:30 AM ET: Crude Oil Inventories
• 06:30 PM ET: FOMC Member Cook Speaks

Notable Earnings for Tomorrow

• A.M: ABBV, ADNT, AVY, BSX, BAM, BG, CDW, CME, CTSH, LLY, EFX, FTV, FOXA, GEHC, JCI, LEA, NYT, NVO, PSX, REYN, SWK, UBER, UBS, YUM
• P.M: AFL, ALGN, ALGT, ALL, GOOGL, ARM, EQH, BOOT, COHR, CCI, CCK, ELF, FMC, GL, MCK, MET, MC, NOV, ORLY, PTEN, QGEN, QCOM, SNAP, SNEX, WEX, WOLF

This material is intended for informational purposes only and should not be considered a personalized recommendation or investment advice. Investors should review investment strategies for their own particular situations before making any decisions.

Schwab Network is brought to you by Charles Schwab Media Productions Company (“CSMPC”). CSMPC is a subsidiary of The Charles Schwab Corporation and is not a financial advisor, registered investment advisor, broker-dealer, or futures commission merchant.

Charles Schwab Media Productions Company and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.

Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. All events and times listed are subject to change without notice.