Markets Slip as Mega-Cap Weakness Pressures Broader Indices

U.S. stocks pulled back on Wednesday, with persistent selling in mega-cap names eventually spilling into the broader market. The S&P 500 and Nasdaq Composite each lost 0.3%, while the Dow Jones Industrial Average declined 0.4%.

The session began on relatively firm footing, as broad-based strength early on offset weakness among the market’s largest stocks. But by midday, selling pressure accelerated, breadth flipped negative, and several sectors slid beneath their flatlines. By the close, decliners outpaced advancers by roughly 8-to-5 on the NYSE and 4-to-3 on the Nasdaq.

The materials sector led losses with a 1.6% drop, weighed down by a sharp sell-off in Freeport-McMoRan after the miner cut its Q3 sales guidance following a fatal accident at an Indonesian site. Mega-cap-driven weakness was most visible in communication services (-0.8%) and information technology (-0.5%). Within tech, Micron gave back ground despite a strong earnings beat, while Oracle slipped after unveiling plans for five new U.S. AI data centers under its Stargate Project. The group did manage to claw back from session lows, supported by reports that Intel is seeking a major investment from Apple, lifting Intel’s stock more than 6%.

Unlike Monday’s AI-fueled rally, investors were more restrained today, a caution underscored by Fed Chair Jerome Powell’s recent comments that equity prices look “fairly highly valued.” The Vanguard Mega Cap Growth ETF fell 0.4%, while Tesla’s nearly 4% rally offered some relief to the consumer discretionary sector, which closed 0.7% higher. Energy also stood out with a 1.2% gain as oil prices climbed 2.5% to $65 a barrel. Utilities and consumer staples provided additional support with modest advances.

Outside of those bright spots, weakness lingered across the market. Smaller caps fared slightly better, though the Russell 2000 and S&P Mid Cap 400 gave back early gains to finish just below their flatlines.

On the policy front, Chicago Fed President Austan Goolsbee told the Financial Times he does not expect a recession and may not support a series of rate cuts. Even so, expectations for easing remain intact, with investors eyeing Friday’s PCE Price Index as the next key data point to shape the Fed’s path.

Our FTinvest 11 model portfolio extended its run today, closing at 865.78 with a modest gain of 0.24%. The day began with a cautious tone, but steady afternoon buying helped the portfolio recover from early hesitancy and push toward another high.

While individual names within the index showed mixed performance, strength in several core holdings provided enough support to keep the advance intact. The upward move reflected the portfolio’s ability to stabilize after recent volatility and continue building on its impressive September momentum.

Though the day’s progress was incremental, the new record highlights the resilience of the FTInvest 11, which continues to benefit from its balanced exposure even as broader markets navigate valuation concerns and shifting expectations for monetary policy.