The S&P 500 and the Nasdaq dipped on Thursday as the recent rally in technology stocks ground to a halt with Nvidia declining despite its stellar quarterly results, reigniting concerns regarding the AI trade.

Nvidia dropped 3.6% despite posting better-than-expected results for the January quarter and forecasting current-quarter revenue above market estimates.

“Investors have been wary of the AI trade and its implications as we look out over the next couple of years and even though Nvidia did deliver strong numbers, it wasn’t enough to convince investors to push the stock higher,” said Jeff Schulze, head of economic and market strategy at ClearBridge Investments.

The Philadelphia SE Semiconductor Index lost 3% after hitting a record high in the last session, while most megacap and growth stocks were lower with Alphabet among the biggest decliners, down 2.2%.

Software and Services Rise

Meanwhile, the S&P 500 software and services index gained 2%, rebounding as Salesforce climbed 3% despite guiding fiscal 2027 revenue below Wall Street expectations.

Several sectors including software, financial brokerage, data analytics and legal services, real estate services and trucking clocked heavy losses earlier this year amid growing AI disruption fears.

The S&P 500 and the Nasdaq closed at two-week highs on Wednesday, fueled by a rally in heavyweight technology stocks.

At 10:11 a.m. ET, the Dow Jones Industrial Average rose 121.68 points, or 0.25%, to 49,603.83, the S&P 500 lost 25.72 points, or 0.37%, to 6,920.41 and the Nasdaq Composite lost 201.10 points, or 0.87%, to 22,950.98.

The information technology index and the communication services index were the biggest decliners among the 11 major S&P sectors.

Financials gained 1.4%, helping offset some losses. Big banks including JPMorgan Chase, Bank of America and Wells Fargo all rose nearly 1% each.

Investors also monitored the latest round of U.S.-Iran talks in Geneva aimed at resolving their longstanding nuclear dispute and averting new U.S. strikes on Iran following a large-scale military buildup.

Crude Oil Falls

Crude oil prices were down around 1%, with the energy stocks index down 0.1%.

February has been a choppy month for U.S. equities, with the main indexes swinging sharply between gains and losses as sentiment towards AI and technology stocks waver, with investors questioning if massive planned AI spending is actually paying off.

Among other stocks, Trade Desk fell 6% after the advertising technology firm forecast first-quarter revenue below estimates amid mounting pressure from larger rivals.

J.M. Smucker jumped 6.6% after the Uncrustables maker beat third-quarter profit and sales estimates. The company also said it had appointed two new directors to its board, after reaching a “constructive engagement” with investor Elliott Investment Management.

C3.ai fell 16.7% after the software provider forecast current-quarter sales below estimates and said it was cutting 26% of its global workforce.

Celsius Holding jumped 14.3% after the energy drink maker reported fourth-quarter revenue above estimates.

Advancing issues outnumbered decliners by a 1.17-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.

The S&P 500 posted 26 new 52-week highs and one new low while the Nasdaq Composite recorded 54 new highs and 55 new lows.

—

(Reporting by Shashwat Chauhan and Ragini Mathur in Bengaluru; Editing by Devika Syamnath)