S&P 500 drops 0.8% as gold jumps about 6% and bitcoin hits its lowest level since November 2024
Gold and silver snapped back sharply on Tuesday while Big Tech and bitcoin sold off, signalling a fast rotation out of crowded AI trades and into perceived havens and select defensives.
The S&P 500 fell about 0.8–0.84 percent to 6,917.81, the Dow slipped roughly 0.3–0.34 percent to 49,240.99 and the Nasdaq dropped 1.4–1.43 percent to 23,255.19, according to CNBC.
CNN reported it was the worst day in two weeks for both the S&P 500 and Nasdaq as technology and software led declines.
Microsoft, Meta Platforms, Apple, Nvidia and Amazon all traded lower, with several “Magnificent Seven” names down around 2–3 percent.
BNN Bloomberg reported that the largest tech stocks faced renewed worries that their valuations had “shot too high and became too expensive” after years of outperformance.
The heaviest selling hit software, especially names seen as vulnerable to AI disruption.
ServiceNow and Salesforce each fell around 7 percent, as per CNBC, while CNN reported Salesforce (CRM) dropped 6.85 percent.
AI startup Anthropic’s new Claude tools for legal work reinforced fears that AI could erode software companies’ business models and market share.
Some market participants framed the move as a periodic reset in crowded trades.
Josh Brown, CEO of Ritholtz Wealth Management, told CNBC that “we have one or two of these periods every year” when “some of the most popular trades of the previous uptrend just get absolutely nuked,” adding that “risk appetite is coming out of anything that has to do with technology.”
Under the surface, breadth looked firmer than the headline indices implied.
BNN Bloomberg reported that most S&P 500 names actually rose.
Palantir Technologies gained about 6.8–7 percent after posting stronger-than-expected profit and guiding to 61 percent revenue growth this year.
The clearest winners were in precious metals.
Spot gold and spot silver rose roughly 6 percent and 7 percent on the day, according to CNBC, while CNN said gold futures climbed 6.7 percent to about US$4,965 a troy ounce and silver futures jumped 10 percent to roughly US$85 a troy ounce.
BNN Bloomberg reported that gold settled around US$4,935.00, up 6.1 percent, and silver rallied 8.2 percent, rebounding from a week in which gold fell from close to US$5,600 to under US$4,500 and silver plunged more than 30 percent in a single session.
Strategists at Barclays said the reversal “underscored how stretched anti-USD positioning had become.”
According to CNN, gold has now outpaced bitcoin over the past five years, based on FactSet data.
Gerry O’Shea, head of global market insights at Hashdex, told CNN that bitcoin’s “divergence from gold” shows most investors currently view gold as the dominant store-of-value in periods of “currency debasement” and macro uncertainty, even though he still expects bitcoin’s longer-term appeal to grow.
Crypto moved in the opposite direction.
Bitcoin dropped to its lowest level since November 2024.
It briefly fell nearly 7 percent to just below US$73,000 before recovering to around US$76,800, leaving it down roughly 40 percent from its October peak above US$126,000 despite the Trump administration’s pro-crypto stance and a pledge to make the United States the “crypto capital of the world.”
Geopolitics added to the risk-off tone rather than defining it.
Markets extended losses and volatility jumped after reports that the United States shot down an Iranian drone approaching a US aircraft carrier.
The VIX spiked as much as 25 percent intraday and briefly touched 20 before settling up about 10 percent, while CNN’s Fear and Greed Index slipped from “greed” into “fear.”
Brent crude rose 1.6 percent to about US$67.33 a barrel, West Texas Intermediate gained 1.7 percent to around US$63.21 and the US dollar index dipped 0.28 percent.
BNN Bloomberg said the 10-year US Treasury yield eased to 4.26 percent from 4.29 percent.
On the stock-specific side, Walmart and PepsiCo stood out on the upside.
Walmart shares gained about 3 percent and pushed the company’s market value above US$1tn, supported by digital growth and new customer acquisition, according to CNBC.
PepsiCo rose roughly 4.9–5 percent after its profit and revenue nudged past expectations, with BNN Bloomberg adding that the company plans to cut snack prices on brands such as Lay’s and Doritos to attract inflation-weary consumers.
The broader backdrop remains earnings- and AI-heavy.
CNBC reported that more than 100 S&P 500 companies are due to report this week, including Alphabet and Amazon.
CNN said investors are increasingly focused on spending plans and on how companies plan to convert aggressive AI and capex outlays into sustainable profit rather than just headline growth.
