Why did US stock averages decline on February 3, 2026?

US stock averages declined as investors moved out of technology and growth names and favored cyclical stocks.

What was the performance of major US stock indices on February 3, 2026?

The S&P 500 lost about 0.8%, the Nasdaq Composite declined 1.4%, and the Dow shed nearly 167 points or 0.3%.

What is the current market outlook despite recent volatility?

Despite current volatility and stretched valuations after a three-year rally, market strategists believe the underlying fundamentals remain strong.

Home / Business and Economy / Tech Sell-Off: Markets Rotate to Cyclical Stocks

Tech Sell-Off: Markets Rotate to Cyclical Stocks

4 Feb

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Summary

US stock averages declined as investors favored cyclical stocks.
The S&P 500 and Nasdaq saw significant losses, while the Dow experienced a dip.
Market fundamentals remain strong despite current volatility and stretched valuations.

Tech Sell-Off: Markets Rotate to Cyclical Stocks

Major U.S. stock averages faced a decline on Tuesday, February 3, 2026, as investors shifted their focus away from riskier growth stocks towards more stable cyclical companies such as Walmart. The S&P 500 index saw a loss of about 0.8%, while the tech-heavy Nasdaq Composite fell by 1.4%. The Dow Jones Industrial Average also experienced a dip, shedding nearly 167 points or 0.3%, despite reaching a new record earlier in the day.

Market strategists noted a confluence of factors influencing the market's movement. While acknowledging the current volatility, some believe the fundamental underpinnings of the market remain robust. However, after a three-year rally marked by double-digit returns, valuations are considered stretched, making the market susceptible to pullbacks like the one observed.