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Tech giants take a breather after record-breaking rally
2 minutes read
21 May 2025

It was a brisk Tuesday morning on Wall Street, and the mood had shifted. After a six-day sprint that saw the S&P 500 surge nearly 20% from its April lows, the US stock market finally took a breather. The rally, powered by big tech and a wave of optimism following President Trump’s recent tariff moves, had left traders wondering: how long could the good times last?
As the opening bell rang, screens flickered red. The S&P 500 slipped 0.39% to 5,940.46. The Nasdaq Composite, home to the tech darlings that had led the charge, dipped 0.38% to 19,142.71. The Dow Jones lost 114 points, closing at 42,677.24. The air of celebration faded, replaced by a sense of cautious reflection.
Tech giants take a back seat
For days, names like Nvidia, Meta Platforms, Apple, and Microsoft had been the market’s engine. On Tuesday, they hit the brakes. Nvidia dropped 0.9%, while its peers followed suit. The technology sector as a whole lost half a percent, ending the S&P 500’s winning streak—the longest in weeks.
The mood wasn’t just about numbers on a screen. Behind the scenes, institutional investors were making moves. Foreign institutional investors (FIIs) sold off shares worth over ₹10,000 crore, while domestic investors stepped in, buying ₹6,738 crore. The tug-of-war reflected deeper anxieties about what comes next.
As Morgan Stanley’s analysts recently noted, “Returns for the S&P 500 Index have topped 25% for two years in a row, creating concerns about whether stocks are overvalued. Historically, the third year of a bull market produces only a mediocre return on average, but it is typically not negative”. The implication: 2025 could be more of a pause year than anything more sinister.
Searching for the next spark
With the rally cooling, attention turned to Washington and the broader economic picture. The market’s recent gains had been fuelled by hopes that trade tensions would ease and that the US economy could sidestep a recession. But with budget negotiations looming and Moody’s downgrading the US credit rating, uncertainty crept back in.
Investor psychology is playing its part. The legendary Sir John Templeton once said, “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria”. Many on Wall Street are now debating whether the current mood signals the start of a new phase.
Meanwhile, company news added its own drama. Victoria’s Secret, facing a potential takeover, adopted a “poison pill” plan after BBRC International lifted its stake to 13%. Board Chair Donna James explained, “In light of the circumstances and consistent with its fiduciary duties, the Board determined it was necessary to adopt a rights plan to protect the long-term interests of all Victoria’s Secret shareholders and guard against tactics to gain control of the Company without paying all shareholders an appropriate premium for that control”.
The day closed with futures little changed, signalling a wait-and-see approach. The market had run hard, and now it was catching its breath. As traders scanned the horizon for the next big headline, one thing was clear: Wall Street’s story is far from over. The next chapter could be just around the corner.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.

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