Stocks experienced significant rotations on Tuesday, a move thathas seen many of the market’s favorite trades fall out of favor—especiallysoftware-related stocks. This followed the AI startup Anthropic launching newcapabilities for its Cowork platform in the legal space. New AI capabilitieshave become a major concern for both investors and employees because of theinherently disruptive prospects of artificial intelligence. Economic moatsbuilt around deep, specialized knowledge and technical know-how could bechallenged, as AI may simplify processes and lower the bar to competency.
The Dow Jones Industrial Average declined by 167 points to 49,241.The NASDAQ retreated 1.55% to 25,339, while the S&P 500 lost 0.84% to6,918. The Russell 2000, a small-cap index with more economically sensitivestocks, rose 0.31% to 2,648. Sector performance showed a roughly half-and-halfpattern, while most stocks trading on exchanges actually posted gains.Technology and communication services were the biggest losers today, whileenergy, materials, and consumer staples were among the biggest gainers. Walmarthit a $1 trillion market capitalization for the first time.
The bond market rallied slightly as investors rotated into safety.The U.S. 5-year Treasury yield stood flat at 3.83%, while the 10-year yielddeclined by 1 basis point to 4.27%. Gold posted its largest single-day gainsince the Global Financial Crisis following its selloff.
Because of the government shutdown, much of the economic data willbe delayed, including the jobs report. We will, however, continue to look forother signs in the market and bring you the most valuable news. This is AdamsWealth Advisors—thank you for listening.