S&P500: Tech Sell-Off Deepens with Nvidia and Palantir Leading Declines

Stock Futures Slide as Rising Yields and Tech Sell-Off Weigh on Markets

U.S. stock futures declined Monday, pressured by surging bond yields and ongoing weakness in tech stocks. S&P 500 futures slipped 0.58%, Nasdaq 100 futures dropped 0.94%, and Dow Jones Industrial Average futures shed 50 points, or 0.1%. All three indexes are coming off two consecutive weeks of losses, primarily driven by a sell-off in high-growth technology shares.

Why Are Tech Giants Losing Their Momentum?

The once-dominant tech sector extended its retreat, with Nvidia and Palantir losing roughly 3% each in premarket trading, deepening last week’s losses of 6% and 11%, respectively. Other key names such as Tesla, Broadcom, and Micron also faced selling pressure. Surging bond yields have fueled this downturn, as the 10-year Treasury yield reached 4.77%, its highest level in over a year.

Rising yields, driven by a stronger-than-expected December jobs report, are reducing the appeal of growth stocks. With Tuesday’s Producer Price Index (PPI) and Wednesday’s Consumer Price Index (CPI) reports on deck, inflation concerns remain at the forefront. These data points will be critical for investors gauging the Federal Reserve’s next steps.

Can Earnings Season Deliver a Lifeline to Markets?

As volatility grips the market, investor focus is shifting to the start of fourth-quarter earnings season. Big banks, including JPMorgan Chase, Goldman Sachs, and Citigroup, are set to report Wednesday, followed by Morgan Stanley and Bank of America on Thursday. Positive results from financials could inject much-needed optimism into markets.

Meanwhile, managed care stocks outperformed after the U.S. government proposed a 4.3% increase in Medicare Advantage reimbursement rates for 2026. Humana surged nearly 6%, with UnitedHealth and CVS Health adding 3% each, signaling resilience outside the tech-heavy sectors.

Which Stocks Are Grabbing Headlines?

Several high-profile stocks posted sharp moves Monday. Quantum stocks plunged following comments from Mark Zuckerberg downplaying near-term applications of quantum technology. Rigetti Computing fell 25%, while D-Wave Quantum dropped 16%. On the flip side, Intra-Cellular Therapies soared 34% after Johnson & Johnson announced a $14.6 billion acquisition deal.

Retailers delivered mixed updates. Lululemon gained over 3% after raising its holiday sales forecast, while Macy’s fell 2% on a tepid fourth-quarter revenue outlook. Moderna saw its shares plummet 20% after cutting its 2025 revenue guidance by $1 billion.

Bearish Outlook as Risks Mount

With bond yields climbing and inflation data on the horizon, the near-term outlook for equities remains bearish. Rising rates are likely to keep growth stocks under pressure, particularly in the tech sector. Investors should also brace for earnings volatility, with weak consumer trends already evident in guidance from Macy’s and Abercrombie & Fitch.

Traders should keep a close eye on inflation reports and Federal Reserve commentary, as these will shape rate expectations and broader market sentiment. For now, caution is warranted, with further downside risk looming in the weeks ahead.

More Information in our Economic Calendar.