U.S. stocks closed lower on Monday as the technology sector selloff persisted and traders braced for a flood of upcoming economic data. The S&P 500 slipped 0.2% at the New York close, erasing early gains to mark its second consecutive losing session. The tech-heavy Nasdaq 100 declined 0.5%, extending its losing streak to three trading days.
"Early optimism has evaporated, with Friday's selloff bleeding into Monday's U.S. session," said Chris Beauchamp, chief market analyst at IG. "After such a strong recovery since April, the temptation to take profits must be overwhelming for many investors—especially with this week's packed macro calendar."
Tech stocks underperformed last week as renewed AI concerns resurfaced. Disappointing earnings from Oracle (ORCL.US) and Broadcom (AVGO.US) exacerbated these worries, offsetting optimism about Federal Reserve rate cuts. RGA Investments CIO Rick Gardner called the sustainability of big tech and AI stock valuations "the trillion-dollar question for 2026," noting that while the technology shows "tremendous promise," many stocks trade as if "all AI productivity gains are already realized today."
The "Magnificent Seven" tech giants showed mixed performance, with Nvidia (NVDA.US), Meta (META.US), and Tesla (TSLA.US) advancing. The group's index edged up 0.1% despite the S&P 500's second straight decline.
Nationwide's Mark Hackett argued that AI bubble fears are "likely overblown," calling the situation "company-specific and relatively contained." He noted that while certain stocks disproportionately influence the S&P 500, "this risk is diminishing as leadership rotates and investors diversify beyond narrow groups," adding, "What we're seeing looks more like market recalibration."
Traders now turn their attention to this week's economic data deluge, including October/November nonfarm payrolls and November unemployment figures due Tuesday, followed by October's partial CPI report and November's full CPI release on Thursday. These reports will help fill data gaps caused by the government shutdown. Economists forecast 50,000 November job additions with a 4.5% unemployment rate.
Wall Street strategists remain bullish on U.S. equities. Morgan Stanley's Michael Wilson suggested moderately weak employment data could boost expectations for Fed rate cuts, lifting market sentiment. "We're back in the 'good news is bad news/bad news is good news' regime," Wilson wrote, noting that "moderate labor market softness would likely be interpreted bullishly."
Meanwhile, Citi strategists led by Scott Chronert joined growing ranks predicting double-digit 2026 gains for U.S. stocks, projecting the S&P 500 could reach 7,700 by year-end—driven by strong earnings and anticipated monetary easing.
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