Wall Street dumped nearly $1 trillion in tech stocks by midday-then bought peanut butter and paint

Key Points:

• Traders sold off high-beta, volatile stocks, particularly chipmakers like Marvell, which dropped 10% after a recent surge, signaling a rotation away from the AI-driven tech rally.
• Investors moved funds into more stable sectors such as consumer staples, real estate, and utilities, with companies like Smucker, Home Depot, and Sherwin-Williams seeing gains as a defensive play against tech volatility.
• The upcoming SpaceX IPO, potentially the largest ever, alongside confidential filings from AI firms OpenAI and Anthropic, is prompting Wall Street to reallocate capital, possibly pulling money away from current tech leaders.
• Market caution is also driven by upcoming inflation data and a strong May jobs report, which have pushed expectations for Federal Reserve rate cuts further out, leading to reduced appetite for high-risk positions.
• Despite geopolitical tensions affecting oil markets, crude prices fell about 3% as traffic through the Strait of Hormuz increased, and investors await SpaceX’s debut to gauge the sustainability of the AI sector’s recent gains.