S&P 500: Palantir Extends Losses While UnitedHealth and Energy Stocks Rise

Nasdaq Falls Over 1% as Tech Sell-Off Deepens; Dow Gains on Rotation

U.S. stocks was trading mixed at the mid-session on Monday as the technology sector dragged the market lower. The S&P 500 is down 0.6%, and the Nasdaq Composite is off by 1.3% as investors rotated out of growth-focused tech stocks.

The Dow Jones Industrial Average, however, climbed 0.4%, driven by gains in industrial and healthcare names like Caterpillar, JPMorgan, and UnitedHealth. All three major indexes are in the red for the past two weeks, with rising Treasury yields and concerns over Federal Reserve policy weighing on sentiment.

Is the Tech Rally Unraveling?

Tech stocks that led the bull market continued their retreat. Nvidia slid 3.1%, and Palantir lost 4%, compounding last week’s losses of 6% and 11%, respectively.

Heavyweights like Tesla and Micron also declined, adding to the sector’s struggles.

The pullback comes as the 10-year Treasury yield reached its highest level since November 2023, a move fueled by stronger-than-expected employment data. Rising bond yields reduce the appeal of growth-oriented tech stocks, as higher borrowing costs erode the value of future cash flows.

Will Earnings Reports Bring Relief?

Investors are closely watching the kickoff of fourth-quarter earnings season. On Wednesday, JPMorgan Chase, Citigroup, and Goldman Sachs will report results, followed by Morgan Stanley and Bank of America on Thursday. These reports will provide critical insight into the health of the banking sector and broader economy.

On the data front, December’s Producer Price Index (PPI) is due Tuesday, while the Consumer Price Index (CPI) will be released Wednesday. Both reports are expected to give clarity on inflation trends, shaping expectations for Federal Reserve rate decisions.

Can Energy Stocks Keep Fueling Gains?

Energy stocks surged Monday, supported by rising oil prices following expanded U.S. sanctions on Russian crude. The Oil & Gas ETF (XOP) jumped 2.6%, extending its recent winning streak. Among top performers, Par Petroleum climbed nearly 7%, while PBF Energy and CVR Energy each rose over 4%.

With oil demand remaining robust and geopolitical tensions impacting supply, energy stocks could see continued strength in the near term, making them an area of interest for traders.

How Long Can Moderna’s Plunge Last?

Shares of Moderna fell over 23%, marking their worst day on record, after the biotech giant slashed its 2025 revenue forecast. The company now expects revenue of $1.5 billion to $2.5 billion, down sharply from earlier guidance of $2.5 billion to $3.5 billion. The disappointing outlook underscores ongoing challenges in vaccine demand and sent the stock tumbling.

What’s the Market Outlook: Bullish or Bearish?

The market faces bearish pressures in the short term as rising bond yields and weak tech performance weigh on sentiment. However, earnings season and key inflation data could provide a catalyst for stabilization or a rebound. If bond yields show signs of leveling off and corporate earnings exceed expectations, the outlook could turn cautiously bullish. For now, traders should brace for potential volatility and watch key earnings and economic reports closely.

More Information in our Economic Calendar.