Here’s something you don’t hear often on Wall Street: Tech had a bad day. Declines in Nvidia , Meta Platforms and Amazon , among others, sent the S & P 500 lower on Tuesday. The Nasdaq Composite suffered a worse fate, sliding 1.5%, its worst day since Aug. 1. The pullback comes as the major averages sit near record highs, perhaps encouraging investors to cash in chips on some of this year’s major tech winners. Nvidia and Meta Platforms remain 38% and 43% higher for the year, respectively, even after the decline. The Technology Select Sector SPDR fund (XLK) is still up 12.2% in 2025 despite falling 1.8% Tuesday. Taking some risk off the table is seldom a bad thing in investing, especially given the 2025 moves. What may be concerning is Tuesday’s slide also coincided with investors appearing to load up on market hedges. Jeff Jacobson, 22V Research head of derivative strategy, noted Sunday that the put skew on the Invesco QQQ Trust — which tracks the Nasdaq-100 index — has jumped to a three-year high. Put skews signal that put options on the underlying asset are more expensive than call options. Or, expressed another way, investors are scooping up downside protection on the QQQ at a fast pace. “Should we see a pullback in tech that is more than just a shallow one, then the 200-day would be a likely level of support,” Jacobson said. The QQQ closed Tuesday’s session at $569.28. A move to its 200-day moving average of $515.93 would entail a 9.4% decline. QQQ YTD bar QQQ year to date UBS is also urging clients to stay cautious near term but remains constructive on the artificial intelligence trade long term due to robust earnings growth and sentiment indicators not pointing to investor euphoria just yet. “We remain confident in the broader AI sector’s long-term growth and resilience. We recommend investors seek balanced exposure across the AI value chain (infrastructure, semis and applications), with a preference for laggards offering a more attractive risk-reward balance. Investors seeking tech exposure may also consider structured investments, such as capital preservation and put-writing strategies, to take advantage of near term volatility,” strategists at UBS wrote.
Tech is showing signs of slowing. Is trouble ahead for Wall Street?
