A rare divergence emerged in U.S. equities on Thursday as the S&P 500 dropped 1.2%, its worst single-day performance since July, and the Nasdaq Composite slid 2.6%, while more than 300 S&P 500 constituents closed higher. The Dow Jones Industrial Average and Russell 2000 both eked out slight gains despite the broader index selloff.
The split pits AI and semiconductor stocks — leaders of a four-year bull run — against consumer staples, small- and mid-cap names, and traditional industry shares that are strengthening. Capital is rotating rapidly between the two camps rather than exiting the market entirely, decoupling major index performance from individual stock results.
Dow Jones Market Data indicates the last comparable extreme divergence, where the S&P 500 fell notably while most constituents rose, occurred in January 2025.
S&P 500 Falls 1.2% as AI Stocks Plunge, Yet Most Constituents Close Higher
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