S&P500 and Nasdaq Index: Tech Stocks Slump as Traders Reassess AI Leaders and Forecast Shifts

• The S&P 500 broke below its 50-day moving average for a third session, with key support levels identified at 6,762.10 to 6,705.42 (short-term value zone) and 6,510.99 (200-day moving average)
• Investors are recognizing that AI expansion threatens not just employees but entire software business models, causing sharp divergence among AI stocks as the market reprices risk
• All three major indexes are declining simultaneously, including the Dow Jones, raising concerns about where capital can be safely deployed outside of equities

Market Summary: Tech Stocks Decline Amid AI Sector Reassessment

Key Developments

Major U.S. equity indices declined Tuesday, February 17, 2026, as investors rotated from technology stocks into safer assets. The Dow Jones (+0.07%), S&P 500 (-0.13%), and Nasdaq all experienced downward pressure, with all three major indices potentially retreating simultaneously for the first time in months.

Technical Analysis

The S&P 500 trades in a technically weak position near the critical 7,000 level, breaking below its 50-day moving average at 6,893.79 for the third consecutive session. Analysts identify three key support levels: the 50-day MA resistance, a short-term value zone at 6,762.10-6,705.42, and the 200-day moving average at 6,510.99. The index has successfully bounced from the 50-day MA four times since the November 21 bottom at 6,521.92.

AI Sector Divergence

Investors are sharply reassessing AI-themed companies, recognizing fundamental differences in value propositions. Market concerns center on AI's potential to disrupt not just employment but entire software business models—a realization that has forced repricing across the technology sector. This phenomenon mirrors historical disruptions (Palm Pilot, Blackberry, floppy disks) but with broader market impact.

Market Implications

The current correction represents a sector-driven selloff where individual stocks and sub-sectors are destabilizing broader indices—"the tail wagging the dog." The traditional "buy the dip" strategy, which succeeded four times since November, may not prove reliable this cycle. Investors face uncertainty about whether the old-economy Dow can support a technology-driven market amid this rotation away from virtual assets toward physical asset-based companies.