U.S. technology stocks experienced declines on Tuesday, June 25, 2024, with the Nasdaq Composite dropping 1.6%, or 409 points, to 25,758 around noon ET. This followed a 1.3% decline for the Nasdaq Composite on Monday.

Shares of Nvidia fell 2.8% during midday trading on Tuesday, while Broadcom shares decreased by 2.3% and Alphabet shares were down 1.1% during the same period. Shares of Meta Platforms and Microsoft have each dropped at least 20% from their recent peaks.

SpaceX shares, however, rose $8.81, or 5.7%, to $163.41 on Tuesday after falling earlier in the trading session. On Monday, SpaceX shares had plunged 16%. The company completed an initial public offering earlier this month, with shares rising above $200 within days of the IPO before declining since June 17.

"Today's big falls in tech stocks without any major catalyst are another illustration of rising volatility in these stocks, a result of what increasingly looks like frothy earnings expectations and/or valuations," James Reilly, a senior market economist with Capital Economics, said in a note to clients. "If the new market leaders, semiconductor firms, also start to struggle, the stock market would be in big trouble," Reilly said.

"For a long time, the market treated AI spending as unquestionably positive," Nigel Green, CEO of deVere Group, said in an email. "Investors are now becoming more demanding. They want evidence that unprecedented spending will translate into unprecedented profits." Green added, "What we're witnessing now is investors demanding proof instead of promises." "That shift can be uncomfortable, but it's ultimately healthy," he said.

In other market activity, the S&P 500 declined 1% on Tuesday, while the Dow Jones Industrial Average rose 43 points, or 0.1%, to 51,756. The Federal Reserve's rate-setting committee indicated last week that it might increase borrowing costs in 2026. The U.S. government is scheduled to release May consumer inflation data on Thursday. Traders estimate a nearly 90% chance that the Federal Reserve will raise its federal funds rate at least once by the end of the year, an increase from 57% one week prior, according to CME Group data.