The S&P 500 pulled back as investors dumped technology stocks and moved into shares more broadly linked to improvements in the economy.

The broad market index fell 0.8%. The Dow Jones Industrial Average dipped 166 points, or 0.3%, after earlier rising as much as 0.5% to touch 49,653.13, a new record. The Nasdaq Composite shed 1.4%.

Most tech shares were in the red, including most of the "Magnificent Seven" names that have reported earnings so far — Microsoft and Meta Platforms were down 3% and 2%, respectively, while Apple was marginally lower. Nvidia also slumped, with the artificial intelligence bellwether's 4% drop adding to its losses for the year. Meanwhile, software stocks continued their 2026 tumble, with shares of names like ServiceNow and Salesforce falling 7% each.

"I think we have one or two of these periods every year. The cause is always different, but the effect is always the same. Some of the most popular trades of the previous uptrend just get absolutely nuked," Josh Brown, CEO of Ritholtz Wealth Management, said on CNBC's "Halftime Report," pointing to Palantir Technologies giving up some of its morning gains.

Shares of Palantir jumped 6% after the defense tech company gave strong fourth-quarter financial results and upbeat guidance. At one point, shares were trading 11% higher in Tuesday's premarket session.

Brown added, "It tells you risk appetite is coming out of anything that has to do with technology."

Pressure didn't only hit tech. In cryptocurrencies, for instance, bitcoin declined 4% and had reached its lowest level since November 2024. This comes after it dropped below the $80,000 level for the first time since last April over the weekend.

There were a few bright spots in markets, however. Walmart gained 2% and surpassed a $1 trillion market capitalization threshold on Tuesday following an eye-watering stock climb driven by its digital businesses growth and acquisition of new customers. PepsiCo advanced 4% after the company reported strong earnings, fueled by improving organic sales across its business. Elsewhere, bank stocks such as JPMorgan and Citigroup were in the green.

"Revenue trends look incredibly solid, but at the margin, there continues to be some concerns emanating around the software space, in particular, related to the potential disintermediation that can occur from artificial intelligence," U.S. Bank Asset Management Group senior investment director Bill Northey told CNBC. "I think that's a story that is still yet to be written, but ultimately, we're seeing that reflected in sentiment at this point in time."

A rebound in silver and gold prices helped sentiment a bit, with spot gold up 5% and spot silver up 6% on the day. Gold and silver have been the most popular trades of retail traders this year. Big losses in silver last week raised fears that the trade unraveling would trigger a risk-off mentality for the group across the board.

Investors this week are digesting more than 100 S&P 500 companies reporting earnings results. In addition to Alphabet, fellow "Magnificent Seven" giant Amazon is slated to report later this week.