US Stocks Mixed as Tech Faces Pressure and Defense Shares Surge on Budget News

New York | EcoPulse24

US stocks ended Thursday's session with mixed and slightly weaker performance, as investors remained cautious about the Federal Reserve's interest rate path and the prospects for profits in an economy sending conflicting signals.

The Nasdaq index saw a clearer decline of about 0.5%, pressured by large-cap technology stocks, while the Dow Jones and S&P 500 hovered near flat levels, reflecting sectoral divergence within the market.

Technology shares came under pressure as investors adopted a more cautious stance following last year's strong gains, which were driven by speculative bets on global expansion in artificial intelligence, particularly among software and data center infrastructure companies.

Shares of Broadcom, Oracle, and Micron all fell by more than 3% as investors reassessed the scale and viability of AI-related capital spending.

In contrast, the defense sector posted strong gains after former President Donald Trump announced plans to raise the US defense budget to $1.5 trillion by 2027, fueling recent momentum in the sector. Shares of Lockheed Martin, RTX, and Northrop Grumman jumped between 4% and 8%.

This rise was further supported by ongoing geopolitical tensions and a tougher stance from the White House on key foreign policy issues, spotlighting defense shares as direct beneficiaries of any future increase in military spending.

EcoPulse24 Analysis:

The session's performance clearly reflects a phase of repositioning in the US market, with risk appetite for tech stocks waning after excessive optimism over AI, and a partial shift of capital toward defensive sectors more closely tied to government spending.

This divergence suggests that investors have yet to form a clear view on interest rates or AI investment returns, increasing the likelihood of continued sideways movement and sectoral volatility in the near term.