The sudden reversal shows how the hottest AI trade and top-performing stock of the year is colliding with a broader market rotation out of Big Tech.

Palantir's price-to-sales ratio of 114 is way above OpenAI's 17. Palantir's success in defense work could block access to growth as enterprise AI payoff remains elusive

Software stocks have been under pressure—and there may be more selling to come as highflying shares of Palantir finally succumb to gravity.

A flight to quality trade happens when investors begin to get more defensive and risk-averse, buying stocks that they perceive as higher-quality and avoiding low-quality ones. It’s typical of a market that is seeking safety as some investors bail out, and may presage a market drop.

Follow all the latest U.S. market action for Tuesday here to see if stocks can shake of some summer torpor and reach fresh highs.