The S&P 500 is heading for its worst month and quarter since 2022, with technology stocks taking a particularly brutal hit. Major tech companies like Microsoft Corp. and Adobe Inc. have fallen at least 25% this year as investors grapple with geopolitical tensions and AI disruption fears. The Nasdaq 100 has entered correction territory, dropping more than 10% from its peak.

Energy stocks have emerged as surprising winners, gaining 39% this year - their best quarter on record. All 22 members of the energy group have rallied, with APA Corp. and Texas Pacific Land Corp. advancing at least 62%. Meanwhile, the equal-weighted S&P 500 is down 8% from its February record, testing key support levels as investors flee megacap tech stocks that dominated 2025 gains.

Microsoft has led the Magnificent Seven's decline, falling 26% since January and becoming the S&P 500's biggest drag despite larger companies having higher weightings. The tech-heavy Nasdaq 100 now trades at 21 times projected 12-month profits, narrowing the valuation gap with the broader market to levels that have historically preceded rallies. Market strategist Steve Sosnick notes that investors' willingness to buy dips has diminished, requiring more concrete catalysts for a rebound.