Tech selloff and strategic moves shape today’s US stock market

2 minutes read

20 August 2025

Tech selloff and strategic moves shape today’s US stock market

The US stock market is navigating a complex landscape as investors wrestle with a sharp selloff in technology shares, significant corporate developments, and anticipation of Federal Reserve guidance later this week. After a mixed trading session on Tuesday, markets are bracing for what could be a pivotal moment at the Jackson Hole Economic Symposium, where Fed Chair Jerome Powell’s speech may signal the future path of monetary policy.

Tech selloff meets strategic investment

Tuesday’s trading revealed a tale of two markets. The Dow Jones Industrial Average inched up slightly, gaining 10.57 points to close at 44,922.39, while the tech-heavy Nasdaq Composite fell sharply by 1.46%, losing 314 points to 21,314.95. The S&P 500 also slipped 0.58%, dragged down by weakness in technology stocks.

Semiconductor companies bore the brunt of the selling pressure. Advanced Micro Devices (AMD) dropped over 5%, reflecting investor concerns about the sustainability of the AI-driven chip rally. Nvidia, the AI chip leader, declined 3.55%, prompting some profit-taking after a remarkable run earlier this year. A CNBC analyst observed, “The selloff reflects a broader reassessment of the semiconductor sector’s near-term prospects. Valuations had become stretched, and this may be a healthy consolidation after months of extraordinary gains.”

Palantir Technologies, another AI-focused firm, also saw shares decline significantly, raising questions about whether valuations reflect fundamentals. Yet amid this tech turbulence, Intel bucked the trend, gaining about 7% following SoftBank’s announcement of a $2 billion investment. Masayoshi Son, SoftBank CEO, commented, “Advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role.”

This sizeable investment signals confidence in Intel’s turnaround efforts and the broader US semiconductor industry, even as Intel recently reported its first annual loss since 1986. Simultaneously, retail giant Home Depot released solid Q2 earnings, with sales up 4.9% to $45.3 billion. CEO Ted Decker noted, “The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects.” Bar chart showing daily percentage change

Awaiting the Fed’s signal: Market poised for policy shift

The Federal Reserve’s upcoming Jackson Hole speech is the focal point for markets this week. Investors are pricing in an 85% chance of rate cuts starting in September, fueled by signs of a cooling labour market and slower economic growth. However, inflation remains above the Fed’s 2% target, complicating the central bank’s decision-making.

Robert Sockin, Citi’s global economist, said, “Powell must navigate political pressures while preserving the Fed’s independence. His speech will likely focus on describing current conditions without committing to specific policy changes.”

Treasury yields have declined amid expectations of easing, while commodity markets remain volatile given geopolitical uncertainties, including the potential for a Russia-Ukraine peace deal. Oil prices have rebounded slightly, but remain pressured by concerns about supply and demand dynamics.

In this environment, investors face a delicate balancing act. The tech sector’s correction may represent a healthy pause after an extraordinary run, while strategic investments like SoftBank’s in Intel could reshape industry dynamics. The Fed’s guidance later this week is poised to be a key catalyst.

As the market digests these developments, the narrative remains one of cautious optimism tempered by economic uncertainties—an unfolding story that will continue to captivate investors in the days ahead.

Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.