Palantir (PLTR) stock slid further in afternoon trading on Tuesday, falling more than 9% as the AI-led tech sell-off dragged the major indexes lower and extended a multi-day slide for one of 2025’s top S&P 500 performers.
With Tuesday’s losses, the tech and defense name is now on track for its fifth consecutive day in the red, its longest losing streak since March.
The pressure on AI names comes at a moment when the broader market rally is starting to show signs of rotation beyond Big Tech.
After months of concentration in a handful of growth giants, sectors like Health Care (XLV) and Homebuilders (XHB), along with small- and mid-cap stocks, have taken on a larger role in driving this summer’s move to record highs.
Still, given Big Tech’s outsized weighting in the index, if the group isn’t leading, gains in the S&P 500 are unlikely to be as sharp or one-sided as they’ve been over the past two years — a dynamic on display in Tuesday’s trading.
Some strategists see this shift as a healthier sign for markets. Citi strategist Scott Chronert framed the moment as “two parallel paths” for the S&P 500 — one still led by AI-fueled growth giants and the other increasingly supported by more traditional, economically tied sectors.
“The simple answer is that we see ongoing Mega Cap Growth participation, if not leadership, but with fundamental and performance broadening creating a more durable structural setup,” Chronert wrote in a Friday note. “The healthiest path to higher index levels is a combination of Growth/Tech leadership persisting but with other areas of the market additive more so than has been the case this past year.”
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