The major US indices have closed lower, with the NASDAQ down by 2.20% and the Russell 2000 index decreasing nearly 3%. The Dow industrial average fell by 748.63 points or 1.69% at 43,428.02, marking a weekly decline of 2.51%.
The S&P index dropped 104.39 points or 1.71%, ending its week at 6,013.13, its poorest week since January 6. The NASDAQ fell by 438.36 points or 2.20% to 19,524.01, also experiencing its worst performance since November 11.
The Russell 2000 decreased by 66.39 points or 2.94% to 2,195.34, with a weekly decline of 3.71%. Following a 20-day closing high, Meta shares fell for four consecutive days, down 7.21% for the week.
Large-cap stocks showed varied performance this week, with Nvidia down 3.21%, Microsoft down 0.34%, and Amazon declining by 5.29%. Alphabet fell 3.01%, while Apple rose by 0.38%. Other notable declines include Tesla at 5.07%, Palantir down 14.91%, and Broadcom down 6.17%.
The sharp declines across major US indices highlight a clear shift in sentiment. A 2.20% drop in the NASDAQ and a nearly 3% decline in small-cap stocks demonstrate that investors reassessed their positions, particularly in high-growth and risk-sensitive assets. The Dow’s 748-point slide underscores similar concerns, dragging it down by 2.51% over the week. The S&P 500 wasn’t spared either, suffering its worst weekly performance since early January.
Tech stocks, which had previously driven monumental gains, saw mounting pressure. Meta’s abrupt reversal after reaching a 20-day closing high suggests that enthusiasm around its recent momentum was replaced with a more cautious stance. A four-day losing streak wiped out its short-term strength, settling at a 7.21% weekly decline. Large-cap names followed suit. Nvidia’s 3.21% retreat comes after a strong rally, while Microsoft’s smaller dip of 0.34% suggests some resilience compared to the broader sell-off. Amazon dropping 5.29% alongside Alphabet’s 3.01% decline reinforces the idea that even well-established names weren’t spared from broader retracements.
Apple, on the other hand, managed to edge modestly higher, a rare sight amid a widespread pullback. Tesla’s ongoing struggles were evident in its 5.07% decline, adding to a series of concerns around demand and execution. Meanwhile, Palantir’s steep 14.91% loss paints a picture of extreme volatility, with broad scepticism around its ability to sustain previous gains. Broadcom also found itself under pressure, shedding 6.17%.
Looking ahead, short-term swings will likely remain pronounced, particularly as traders balance positioning against upcoming catalysts. The steep nature of the selloff suggests risk-taking has cooled, but that does not mean further downside is off the table. The way institutional investors adjust portfolios in response to this shift will provide clues. Some may see discounted valuations as opportunity, while others could opt for more caution, waiting for confirmation of stabilisation before re-entering.
For those assessing derivatives tied to these names, close attention to volume trends and open interest may help in gauging sentiment shifts. If downside positioning accelerates, expectations of further weakness could become self-reinforcing. Conversely, if hesitation to extend declines emerges, it may indicate markets are reaching a more stable footing.
Highly volatile names continue to be the most affected. With the Russell 2000 lagging, the appetite for higher-risk equities appears to be fading. A bounce-back is not guaranteed, especially if overall liquidity tightens or macroeconomic conditions shift in an unfavourable direction. If hedging activity increases, that could reinforce defensive behaviour, particularly within sectors that have seen recent selling pressure.
While broader sentiment may feel fragile, it is the reaction in the options market that could provide some of the clearest signals on what comes next. Relative strength in defensive positioning and shifts in implied volatility levels will assist in determining the degree of caution that institutions are exercising. Watching for sharp swings in weekly expiry contracts could provide early indications of any potential shift.
