S&P500 and Nasdaq: US Stock Market Split as Dow Drops, Tech Rallies

S&P 500 Edges Lower After Record High as Profit-Taking Emerges

The S&P 500 Index (SPX) is slightly lower shortly after the mid-session on Wednesday. The trend is up on the daily chart with the market posting a new record high at 6,965.69 earlier in the session. The index is well-supported by the swing bottom at 6,824.21 and the 50-day moving average at 6,816.42, which was recently tested on January 2.

Nasdaq Composite Breaks Out, Eyes All-Time High at 24,019

The main trend was reaffirmed on Wednesday when the Nasdaq Composite (IXIC) took out a pair of main tops at 23,665.25 and 23,698.93. This puts the index in a position to challenge the all-time high at 24,019.99. The 50-day moving average at 23,287.40 is support, followed by the new swing bottom at 23,119.49.

Dow Jones Retreats From Record After Four-Day Rally

The Dow Jones Industrial Average is edging lower late in the session after reaching a new record high at 49,621.43. The price action suggests profit-taking or rebalancing is taking place after a spectacular four-day rally. Near-term support is the pair of swing bottoms at 47,853.04 to 47,849.48. The major support and trend indicator is the rising 50-day moving average at 47,717.61.

A minor reversal could form today if there is a lower close. This won’t change the trend to down, but if confirmed it could fuel a 2 to 3 day correction into a 50% level at 48,737.23.

Tech Stocks Lead Gains as Microsoft, Nvidia, Broadcom Advance

Today’s rally is being driven as investors extended the rally in technology stocks from the previous session. Hot stocks in the tech sector included Microsoft (+2.0%), Nvidia (+1.5%) and Broadcom (+1.5%). The technology sector is posting a 0.44% gain at 19:17 GMT.

Communication Services (+0.91%), Healthcare (+0.58%) and Consumer Discretionary (+0.49%) are also top performers.

Seven Sectors Drag S&P 500 Lower, Utilities Lead Decline

Flipping the S&P 500 Index lower is the loss in 7 out of 11 sectors. The worst performer is Utilities (-2.26%). Lower gold and silver prices are dragging the Materials sector 1.47% lower.

At 19:17 GMT, the blue chip Dow Jones Industrial Average is trading 49,151.23, down 310.85 or -0.63%. The benchmark S&P 500 Index is at 6,944.34, down 0.48 or -0.01%. The tech-weighted Nasdaq Composite is at 23,658.042, up 110.869 or +0.47%.

JPMorgan Downgrade Pressures Banking Sector

The banking sector is weighing on the Dow today led by a 2.5% loss in JPMorgan Chase, which fell after Wolfe Research downgraded the bank to “peer perform” from “outperform.”

In commodities news, profit-taking is putting pressure on gold and consequently, SPDR Gold Shares (GLD) are headed for their first down day of 2026. The fund is mirroring the 1% drop in physical gold. A drop in crude oil prices is weighing on the energy sector.

Market Outlook: Profit-Taking More Likely Than Trend Change

Looking ahead, a drop in the Dow and a potential reversal top in the S&P 500 after making new record highs are red flags for follow-through selling on Thursday. Coming from all-time highs, however, is more indicative of profit-taking than an impending change in trend.

More Information in our Economic Calendar.