Small Caps, Pharma Surge As AI Rotation Broadens, Nvidia Tumbles: What's Moving Markets Tuesday?

Wall Street's sector rotation entered full throttle Tuesday, with investors pouring into previously overlooked corners of the market amid an AI-driven shift that now favors undervalued small caps and defensive names such as health care.

• XLV shares are at critical resistance. Check the market position here.

The Russell 2000 jumped 2% Tuesday, extending its rally over the past three sessions to 7%, marking its best three-day performance since November 2024. The move signals growing appetite for cyclical and underpriced plays, with traders betting that artificial intelligence will unlock productivity gains across a wider array of sectors.

Health care emerged as the session's standout, with the Health Care Select Sector SPDR Fund (NYSE:XLV) rising 2.2% on the day and 10% month-to-date — its strongest monthly gain since April 2020.

Meanwhile, high-flying chip stocks continued to cool. NVIDIA Corp. (NASDAQ:NVDA) sank nearly 4% after reports that Meta Platforms Inc. (NASDAQ:META) was considering a multibillion-dollar investment in Alphabet Inc.’s (NASDAQ:GOOG)(NASDAQ:GOOGL) custom AI chips. The move raises concerns about a potential erosion of Nvidia's dominance in the generative AI supply chain.

Nvidia is now down 14% in November, on pace for its worst monthly performance since late 2022.

Advanced Micro Devices Inc. (NASDAQ:AMD) fell 7% Tuesday, deepening its November slide to 20%. The stock is also tracking for its worst monthly drop since September 2022.

While chipmakers struggled, some tech heavyweights continued to attract buyers. Alphabet hit a record above $320 per share and is now up for a sixth consecutive month as investor optimism grows over Google's competitive edge in AI.

Apple Inc. (NASDAQ:AAPL) shares also touched new all-time highs near $280, supported by CEO Tim Cook's commitment to boosting investment in China.

Within earnings movers, Zoom Video Communications Inc. (NASDAQ:ZM) surged past 13% after posting stronger-than-expected quarterly results, eyeing its best daily performance since November 2022. In contrast, Burlington Stores Inc. (NYSE:BURL) tumbled 10% after issuing a weaker-than-expected fourth-quarter forecast.

In commodities, gold rose 0.5% to $4,150 per ounce, while oil slid 1.5% to $57 per barrel. The pullback in crude followed reports that Ukraine had accepted a U.S. peace proposal. However, Ukrainian President Volodymyr Zelensky said further negotiation is still required.

Bitcoin (CRYPTO: BTC) was largely unchanged at around $87,000. The world's largest cryptocurrency is down 20% month-to-date, on track for its worst monthly performance since June 2022.

Tuesday’s Performance In Major U.S. Indices, ETFs

Major Indices	Price	1-day chg. %
Russell 2000	2,460.96	2%
Dow Jones	47,027.76	1.2%
S&P 500	6,755.55	0.8%
Nasdaq 100	24,973.18	0.4%

According to Benzinga Pro data:

• The Vanguard S&P 500 ETF (NYSE:VOO) rose 0.7% to $619.23.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) rose 1.2% to $469.94.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) gained 0.4% to $607.16.
• The iShares Russell 2000 ETF (NYSE:IWM) strengthened 1.9% to $244.45.
• The Health Care Select Sector SPDR Fund outperformed, up 2.2%; the Energy Select Sector SPDR Fund (NYSE:XLE) lagged, down 0.8%.

Russell 1000’s Top 5 Gainers On Tuesday

Stock Name	% Change
Amentum Holdings, Inc. (NYSE:AMTM)	20.61%
Inspire Medical Systems, Inc. (NASDAQ:INSP)	15.32%
Zoom Communications Inc.	14.20%
Woodward, Inc. (NASDAQ:WWD)	12.05%
The Gap, Inc. (NYSE:GAP)	10.44%

Russell 1000’s Top 5 Losers On Tuesday

Stock Name	% Change
Burlington Stores, Inc.	-10.20%
Advanced Micro Devices, Inc.	-6.42%
Circle Internet Group, Inc. (NYSE:CRCL)	-4.82%
Lumentum Holdings Inc. (NASDAQ:LITE)	-4.26%
Texas Pacific Land Corp (NYSE:TPL)	-4.24%

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