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Sector Update: Tech Stocks Fall Tuesday Afternoon

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Tech stocks were lower Tuesday afternoon, with the State Street Technology Select Sector SPDR ETF (XLK) falling 2.7% and the State Street SPDR S&P Semiconductor ETF (XSD) dropping 6.4%.

The Philadelphia Semiconductor index declined 5.3%.

In corporate news, Microsoft-backed (MSFT) OpenAI was sued by a college student's family who said that ChatGPT caused their son's overdose because he followed the chatbot's medical advice about mixing substances, Bloomberg reported, citing a lawsuit filed in the Superior Court of California for the County of San Francisco. Microsoft shares were down 0.8%.

ZoomInfo Technologies (GTM) faces execution risk in delivering a material re-acceleration in top-line growth amid job cuts, and a downward revision to its full-year 2026 sales guidance is discouraging, RBC Capital Markets said in a note. Stifel downgraded ZoomInfo to hold from buy, while adjusting its price target to $4 from $12. ZoomInfo shares slumped 34%.

Alphabet's (GOOGL) Waymo is recalling 3,791 robotaxis in the US due to a software issue that could likely cause the vehicles to drive onto flooded roads, Reuters reported Tuesday, citing the National Highway Traffic Safety Administration. Alphabet shares were shedding 1.1%.

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