Stocks moved mixed at midday as a broad set of growth and AI-related names pulled back after a rally in the prior session, while energy shares advanced on higher oil prices. Quantum computing bets led the declines, with Rigetti Computing down 10%, D-Wave Quantum off 7%, and IonQ down 4%. IBM, which announced plans to invest more than $10 billion toward quantum computing, fell more than 7% and weighed on the Dow’s tech exposure.
Meanwhile, GameStop climbed about 6% after reporting first-quarter revenue of $835.3 million, a 14% increase from a year earlier, and announcing a $2 billion share repurchase authorization approved by its board. The stock movement underscored how investors are parsing traditional retail results alongside boardroom capital actions in a market straining for catalysts.
In the backdrop, two photonics names endured a pullback after two consecutive winning days. Coherent and Lumentum had rallied on AI and data-center demand but moved lower in midday trade, with Coherent down almost 3% and Lumentum off more than 8% from their prior-session gains.
Energy shares were firmer as oil prices rebounded; West Texas Intermediate rose nearly 2%, helped by comments from Israel’s prime minister that the country and the U.S. are prepared to act if necessary to deter Iran. Exxon Mobil and Marathon Petroleum rose about 3%, and APA Corp edged up around 2%.
In the private markets space, liquidity concerns resurfaced as Bloomberg News reported Partners Group capped withdrawals from one of its private equity funds. That news pushed Blackstone and KKR lower by more than 4%, with Blue Owl Capital down about 3%, highlighting the sensitivity of alternative-asset proxies to liquidity developments.
Cybersecurity peers also traded broadly lower after a stronger quarter from some names by price action alone struggled to offset elevated expectations. Palo Alto Networks slid about 6% even as it posted stronger-than-expected revenue guidance for the current quarter and raised its full-year revenue outlook. The market’s reaction reflected a tug-of-war between headline-beating numbers and the margin or guidance factors investors are watching closely.
Software-maker GitLab declined roughly 2% after guiding to adjusted earnings per share of 17 to 18 cents, below the consensus 19 cents per share from analysts, and announcing a plan to reduce its full-time workforce by about 14% (roughly 350 employees) and exit 22 countries. The company estimated pretax restructuring charges of $30 million to $35 million.
Marvell Technology stood out on the upside, building on Tuesday’s best-day move of 32% by rising about 6% in midday trading. Cboe Global Markets gained roughly 3% after a three-day slide that raised concerns about the spread of perpetual futures in the U.S. exchange landscape.
Ulta Beauty traded about 4% lower even as it raised its full-year earnings guidance to a range of $28.36 to $28.80 per share and reaffirmed a 6% to 7% revenue-growth target for the year, in line with or slightly above consensus expectations. Shake Shack slipped about 3% after Morgan Stanley trimmed its rating to equal-weight from overweight and Raymond James lifted its stance to outperform from strong buy, with analysts pointing to margin pressures from higher beef and energy costs.
Medtronic advanced roughly 5% after reporting fiscal fourth-quarter revenue of $9.81 billion and adjusted earnings in line with estimates, though full-year earnings guidance came in a touch short of expectations. Yum Brands gained around 2% after Morgan Stanley upgraded the stock to overweight from equal-weight, with analysts noting attractive valuation and a solid growth trajectory.
Key takeaways
- Quantum computing equities soften: Rigetti down 10%, D-Wave -7%, IonQ -4%, IBM off more than 7% as traders take profits after a prior rally, underscoring higher volatility in AI hardware plays.
- Mixed earnings signals: GameStop up about 6% on Q1 revenue of $835.3 million (up 14% YoY) and a $2 billion buyback authorization; Palo Alto Networks and GitLab show caution despite positive guidance and cost actions, respectively.
- Energy leadership persists: Oil prices rebound near 2% and major energy names advance, highlighting a risk-on tilt tied to geopolitical risk and supply considerations.
- Liquidity and valuation dynamics weigh: Private equity liquidity concerns and mixed guidance across tech names keep the market in a cautious stance as investors balance growth upside with margin and macro sensitivities.
What drove the move
According to CNBC, traders rotated after a session where high-growth, AI-adjacent stocks had surged, triggering profit-taking in parts of the sector. The quantum-computing complex—once a darling of speculative money—showed broad weakness as investors reassessed the pace of commercialization and the long-run cost of capital for heavy AI infrastructure bets. The sector’s sensitivity to news about funding and policy support remains elevated, and IBM’s heavy investment outlook for quantum computing served as a reminder that the program’s scale hinges on multi-year funding cycles and execution, not single quarters of results.
At the same time, upbeat data points or company-specific beats were not enough to buoy sentiment across all tech and cybersecurity names. Palo Alto Networks’ revenue guidance was stronger than expected for the near term, but the stock still declined, suggesting investors are prioritizing margin trajectory and longer-term profitability over near-term beat-and-raise narratives. GitLab’s cautious EPS outlook and its sizable cost-cutting plan also signaled that investors are focused on efficiency and headcount discipline in a tight operating environment.
Oil’s rebound provided a separate impulse for the energy complex, with geopolitical risk contributing to a risk-on tone in the sector. Exxon’s and Marathon’s roughly 3% gains reflect a continue-to-hold stance by investors eyeing commodity-linked names as a hedge against macro uncertainty. The Israeli prime minister’s remarks about potential action against Iran—carrying a regional risk premium—helped lift energy bets as the inflation trade remains a central market pillar.
Market reaction
Equity markets showed bifurcation, with energy stocks the relative winners and traditional growth proxies under pressure. The quantum and cybersecurity stacks illustrate how market participants are balancing the possibility of longer cycles of capital intensity and earnings visibility against the immediate revenue gains from AI-led spending. The broadened weakness in smaller, more speculative corners of the tech universe—such as speculative AI platforms—adds to a broader narrative: investors are increasingly differentiating between winners with durable margin profiles and the broader AI hype cycle.
Beyond individual names, the liquidity backdrop in private markets is also shaping trading. The Partners Group report of capped withdrawals hit a nerve among investors who monitor private-equity liquidity as a potential amplifier of volatility in correlated public markets, a dynamic that has shown up in the price action of managers like Blackstone, KKR and Blue Owl.
What analysts are saying
Analysts emphasized a split market where strong revenue visibility in some names contrasts with margin and cash-flow concerns in others. The declines in quantum plays despite a recent rally suggest investors are positioning for a more protracted commercialization path while remaining sensitive to policy, funding cycles and potential capital-outlay pressures tied to AI infrastructure investments. In the cybersecurity space, guidance-driven strength could not fully offset concerns about cost structures and profitability margins in the near term.
Bigger picture
The session underscores a broader theme in 2024–2025 markets: a continued rotation between high-momentum sectors tied to AI and longer-horizon capital-intensive plays, and sectors that can deliver visible earnings but carry higher operating costs. The oil-price uplift keeps energy equities buoyant in a period of elevated macro risk, while liquidity concerns in private markets remind investors that growth exposure can be vulnerable to shifts in funding conditions. As the market weighs the path of rates, inflation dynamics and central-bank policy signals, valuation discipline remains a priority for traders navigating a landscape of ongoing technological disruption and geopolitical complexity.
What to watch next: upcoming quarterly results and guidance across large-cap tech and cybersecurity names, any fresh commentary from central banks on rate trajectories, and reports on private-market liquidity conditions that could influence investor risk appetite. Key catalysts include further quarterly earnings, potential updates to AI-capital expenditure plans, and any developments on energy supply and geopolitics that could shift the risk-reward balance for equity markets.
