Tech Pullback Drags Stocks Lower as Oracle and Broadcom Lead Nasdaq Slide

With input from CNBC, Bloomberg, and Investor’s Business Daily.

Stocks gave back early gains Wednesday as investors once again backed away from big-name tech, pushing the Nasdaq sharply lower and extending a rough stretch for the market.

The S&P 500 fell about 0.8%, while the Nasdaq Composite slid 1.1%. The Dow Jones Industrial Average held up a bit better but still slipped roughly 100 points, or 0.2%.

The selling was led by heavyweight AI and chip stocks. Oracle dropped more than 4%, Broadcom sank over 5%, and Nvidia slid more than 3%, all part of a broader rotation away from high-growth tech names.

“We’re seeing a pretty clear shift from large-cap growth into large-cap value,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “Investors are positioning more defensively for what comes next year. The big question now is who actually makes money from these massive AI investments.”

That shift has already taken a toll this month. Oracle is down about 10% in December, while Broadcom has fallen roughly 19%, as money flows into more traditional sectors like health care and financials.

Mulberry doesn’t think the rotation is finished. He expects investors to keep trimming exposure to richly valued tech stocks into 2026, especially with lingering uncertainty around interest rates.

“When it comes to AI, free cash flow is what really matters,” he said. “You can dress up a balance sheet, but you can’t fake cash flow. What drove the market higher is now becoming the biggest risk.”

Wednesday’s losses put both the S&P 500 and the Dow on track for a fourth straight down day. Stocks slipped Tuesday as well after delayed federal jobs data offered a clearer — and less comforting — look at the US economy following this fall’s government shutdown.

In short: the market’s AI love affair isn’t over, but for now, investors are clearly taking some chips off the table.