More Drops Raise Fears About Tech Valuations

Stocks wavered to a mixed close on Wall Street on Wednesday as losses for several tech giants including Microsoft weighed on the market.

• The S&P 500 fell 7.24 points, or 0.1%, to 7,358.22, even though more stocks rose than fell within the index.
• The Dow Jones Industrial Average rose 182.06 points, or 0.4%, to 51,848.90.
• The Nasdaq composite fell 110.40 points, or 0.4%, to 25,476.64.

Declines for several influential tech heavyweights, including Microsoft, pulled the broader market lower even though most stocks in the S&P 500 gained ground, the AP reports. That was also the case on Tuesday, when tech stocks pulled the market lower despite broader gains elsewhere.

A 2.3% drop in Microsoft was the heaviest weight on the market. Oracle slumped 4.6%. Many large tech companies have been behind Wall Street's record-setting run throughout the year, but analysts have warned their valuations may have become stretched. "The next phase of the AI investment cycle is beginning to collide with market discipline," said Jason Vaillancourt, chief portfolio strategist at Columbia Threadneedle, in a research note.

• Google's parent company Alphabet slipped 0.2%. The company is replacing Verizon in the Dow on Monday. The company's inclusion in the S&P 500 means more to investors, however, because 401(k) accounts are much more likely to include an S&P 500 index fund than anything tied to the Dow. Alphabet will become the fifth "Magnificent 7" tech giant to join the Dow. The others are Apple, Amazon, Microsoft, and Nvidia.

Oil prices continued slipping, easing inflation fears, as the US and Iran negotiate a possible end to their war. Brent crude, the international standard, fell 3.8% to $73.87 a barrel. It has been trading below $80 in recent days but is still above the roughly $70 per barrel it was trading at in late February before the war began. US crude prices fell 3.9% to $70.34 a barrel. On Wall Street, oil companies had some of the biggest losses. Exxon Mobil fell 2% and Chevron lost 2.6%. Some of the bigger winners on Wall Street included homebuilders following Congress' approval of legislation beneficial to the industry. KB Home surged 16.7% and DR Horton jumped 6.7%

Gold prices fell 3.4% to settle at $4,008.80 an ounce. Earlier in the day, gold briefly traded below $4,000. It hasn't settled below that level since November. Gold was above $5,000 an ounce earlier in the year. The precious metal is often seen as a barometer of the appetite for risk among investors, with more buying at times of increased anxiety and more selling as anxiety eases.