A wave of anxiety permeated the markets on Tuesday, leading to declines in stock indices and a notable dip in Bitcoin, which hit its lowest valuation since November 2024.
The Dow Jones Industrial Average finished the day down 167 points, equivalent to a 0.34% drop, following a tumultuous session where it plummeted by as much as 575 points. The S&P 500 fell by 0.84%, while the tech-heavy Nasdaq Composite experienced a sharper drop of 1.43%. This marked the worst trading day for both the S&P 500 and the Nasdaq in a fortnight, driven predominantly by losses in technology and software stocks.
In tandem with the stock market downturn, Bitcoin saw a significant decline of nearly 7%, briefly dropping below the $73,000 mark. It subsequently bounced back slightly to around $76,800, yet remains approximately 40% off its record high of over $126,000 reached in October. Despite the support from the Trump administration, which aimed to position the U.S. as the “crypto capital of the world,” Bitcoin’s value has suffered amidst a volatile trading environment characterized by a series of sell-offs.
Contrasting this trend, precious metals experienced a resurgence. Gold prices surged by 6.7% to approximately $4,965 per troy ounce, while silver climbed an impressive 10% to around $85 per troy ounce. The stability offered by gold in uncertain times has positioned it as a preferred store of value among investors, particularly in light of ongoing geopolitical tensions and economic uncertainty, according to Gerry O’Shea, head of global market insights at Hashdex.
Further weighing on the stock market were developments in the artificial intelligence sector. The AI startup Anthropic’s announcement of new capabilities for its Claude chatbot heightened concerns about potential disruptions within the legal service industry, prompting a sell-off in related software firms. For instance, shares of Salesforce dropped by 6.85%. Analysts noted a rotation within the tech sector, as investors began to favor less vulnerable areas such as memory technology over software due to AI-related fears.
Despite the overall market decline, there were bright spots, with Walmart’s shares climbing 2.94%, boosting its market capitalization past the $1 trillion milestone for the first time.
Recent geopolitical developments further contributed to market volatility, particularly following news of the U.S. military shooting down an Iranian drone near a U.S. aircraft carrier. This incident exacerbated Wall Street’s unease, leading to a rise in oil prices — Brent crude increasing by 1.6% to $67.33 a barrel and West Texas Intermediate rising 1.7% to $63.21 a barrel.
Through these turbulent developments, the markets are navigating a complex landscape filled with economic shifts and geopolitical tensions, presenting both challenges and potential opportunities for strategic investors.