The Nasdaq and S&P 500 are losing ground while global markets rally, hit by a hawkish Federal Reserve and a broad shift of capital out of U.S. tech stocks. A one-day bounce on the Iran peace deal quickly faded, leaving the Nasdaq down 0.41% and the S&P 500 off 0.19% in the following session, even as the Dow Jones Industrial Average hit a record above 52,000.
A brief peace rally fades
When the Iran peace deal was announced, markets jumped. The Nasdaq surged about 3%, and the S&P 500 added nearly 2%. But the relief was short-lived. The next trading day, those gains evaporated. The Dow’s record close above 52,000 showed the divergence: money is leaving tech and moving into sectors that benefit from lower oil prices and a stronger global economy.
The Fed’s hawkish turn
Fed Governor Kevin Warsh removed the easing bias from the Fed’s statement on June 16. The dot plot abandoned its last projected rate cut for 2026. With inflation running at 4.2%, higher interest rates look more likely. That’s bad for tech and growth stocks, because future earnings get discounted more heavily when rates rise. The market is repricing that risk now.
Capital flows to Europe and Japan
The money leaving U.S. tech isn’t sitting idle. It’s rotating into European industrials — the STOXX 600 hit an all-time high. Japanese exporters are also getting a lift; the Nikkei surged nearly 5% to cross 70,000. Energy-dependent sectors are drawing capital too, helped by falling oil prices and the peace deal.
SpaceX IPO adds to tech pressure
SpaceX, trading under ticker SPCX, went public on the Nasdaq at $135 on June 12. It surged to nearly $220 and briefly overtook Amazon, becoming the world’s fifth-largest company. But its strong performance has pulled capital from existing Nasdaq positions rather than attracting fresh money into the market. That’s added to the selling pressure on other tech names.
Oil prices are down, the Iran peace deal is signed, and the Fed shows no sign of backing off. The market’s next move depends on whether the rotation broadens or whether U.S. tech can find a floor. For now, the Dow’s record and the Nasdaq’s slide tell the same story from opposite sides.
