Small Caps, Pharma Surge As AI Rotation Broadens, Nvidia Tumbles: What’s Moving Markets Tuesday?
Wall Street’s sector rotation entered full throttle Tuesday, with investors pouring into previously overlooked corners of the market amid an AI-driven shift that now favors undervalued small caps and defensive names such as health care.
• XLV shares are at critical resistance. Check the market position here.
The Russell 2000 jumped 2% Tuesday, extending its rally over the past three sessions to 7%, marking its best three-day performance since November 2024. The move signals growing appetite for cyclical and underpriced plays, with traders betting that artificial intelligence will unlock productivity gains across a wider array of sectors.
Health care emerged as the session’s standout, with the Health Care Select Sector SPDR Fund (NYSE:XLV) rising 2.2% on the day and 10% month-to-date — its strongest monthly gain since April 2020.
Meanwhile, high-flying chip stocks continued to cool. NVIDIA Corp. (NASDAQ:NVDA) sank nearly 4% after reports that Meta Platforms Inc. (NASDAQ:META) was considering a multibillion-dollar investment in Alphabet Inc.’s (NASDAQ:GOOG)
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