Big Pullback in Stocks That Many Expected Has Yet to Arrive

Despite Tuesday’s wobble, the narrative that has been fueling the sharp recovery in US equities since April remains supportive as the drivers of the rally are still intact.

The pullback on the Nasdaq was largely due to profit taking on Nvidia Corp. and Palantir Technologies Inc., two of the hottest stocks this year. Investors rotated into defensive names to diversify beyond the most crowded trades, while staying invested in a fundamentally solid market.