Nasdaq Plunges Over 1% as Tech Selloff Fuels Rotation into Cyclicals

US Technology stocks showed significant weakness during trading on Wednesday. The Nasdaq slumped to its lowest closing level in over a monthafter flirting with record highs just a week earlier.

The S&P 500 fell 0.84%, and the Nasdaq dropped 1.4 % as investors rotated out of high-flying tech stocks into cyclical sectors. Advanced Micro Devices plunged over 15% after disappointing Q1 guidance, while software stocks like Service Now and Salesforce declined nearly 7%, making technology the worst-performing sector.

The Dow’s advance came amid a sharp increase in Amgen shares, which rose 8.2% after reporting better-than-expected fourth quarter results.

Eli Lilly shares soared over 10% after beating earnings and providing optimistic guidance, while competitor Novo Nordisk fell 6% after warning of a 5-13 per cent decline in 2026 sales and operating profit. The divergence highlights intensifying competition in the weight-loss drug market, with Eli Lilly’s revenue growing 45 per cent in 2025 compared to Novo’s 6%.

In U.S. economic news, payroll processor ADP reported that private-sector employment increased by far less than expected in January. ADP said private sector employment rose by 22,000 jobs in January after climbing by a downwardly revised 37,000 jobs in December.

Gold climbed near $5000 per ounce following a surge in the previous session. Safe-haven demand intensified after U.S. forces downed an Iranian drone near an aircraft carrier in the Arabian Sea, despite scheduled U.S.-Iran diplomatic talks remaining on track for Friday.

The U.S. and Iran agreed to hold talks in Oman on Friday, officials for both sides said, even as they remained at odds over Washington’s insistence that negotiations include Tehran’s missile arsenal and Iran’s vow to discuss only its nuclear program.

WTI crude oil rose 1% to settle at $64, driven by escalating U.S.-Iran tensions after drone incidents near U.S. military assets. Reports that Iran nuclear talks may collapse erased earlier optimism, prompting traders to price in higher geopolitical risk premiums despite ample global supply.

Copper fell 0.77% to $6.04 per pound but rebounded from a four week low as Chinese manufacturers returned to purchase at lower levels ahead of the Lunar New Year. Despite recent volatility, copper is up 35% year-over-year as supply shortages intensify amid the AI infrastructure buildout.

Nifty rose for the third consecutive session, gaining 48 points to close at 25,776. After the first 15 minutes of volatility, Nifty consolidated in a narrow band of 25700-25800 for the rest of the session. Nifty IT plunged nearly 6%, its steepest fall in six years, amid investor worries about AI competition for software firms following Anthropic’s launch of a legal tool for Claude AI.

Nifty has managed to close above its 50 DEMA, currently placed at 25647. The trend remains bullish for Nifty, as it is placed above key moving averages. Nifty’s Key support lies in the 25,500–25,650 band, with resistance at 25,863 and 26,373.

Source: HSL Prime Daily, 05 Feb 2026