U.S. stock market selloff: Alphabet, Sarepta, Lantheus lead broad decline amid trade tensions and economic headwinds

U.S. equity markets witnessed a broad-based pullback on Wednesday, with several high-growth and mid-cap names among the steepest decliners. Dragged down by sector-specific headwinds, mixed earnings, and rising global uncertainty, 24 major stocks on the Nasdaq and NYSE registered losses between 6% and 23%, underscoring renewed investor caution. The day’s sharpest drops came from the healthcare and technology sectors, while economic-sensitive industrials and fintech firms also faced pressure from weaker sentiment and macro volatility.

Why did Lantheus Holdings and Sarepta Therapeutics fall sharply?

Lantheus Holdings, Inc. plunged 23.23% to $80.49 after disappointing earnings and a guidance cut triggered a wave of analyst downgrades. Despite a 40.71% gain over the past year, investors appeared spooked by slowing growth in its radiopharmaceutical pipeline and reduced expectations for 2025 revenue contributions.

Meanwhile, Sarepta Therapeutics, Inc. fell 21.45% to $36.72, continuing its prolonged selloff — the stock is now down nearly 65% over the past 12 months. The latest dip followed fresh concerns over regulatory hurdles for its gene therapy treatments and softening demand outlook amid tightening reimbursements.

What drove losses in LifeStance Health and Payoneer Global?

LifeStance Health Group, Inc. lost 15.88% to close at $5.51, as the behavioural healthcare company faced investor scrutiny over operating margins and scale sustainability. With no trailing P/E ratio, market participants questioned its profitability path.

Payoneer Global Inc., a fintech platform serving cross-border businesses, tumbled 13.60% to $6.16. A significant spike in selling pressure came amid weaker-than-expected guidance and fears that global SMB payment flows may decline under increasing geopolitical tensions and regulatory scrutiny on digital wallets.

Why did GEO Group and Upstart slump despite strong 1-year returns?

The GEO Group, Inc., which has more than doubled in value over the past year, saw a 10.04% correction to $27.32. Despite a high P/E ratio of 124.18, analysts noted that political uncertainties surrounding private prison contracts could weigh on future earnings visibility.

Upstart Holdings, Inc., another 2024-25 outperformer, fell 9.65% to $46.44. The AI-driven lending platform’s valuation concerns intensified amid higher delinquency rates and a potential Federal Reserve tightening bias later this year.

Which industrials joined the tech-heavy correction?

Fortune Brands Innovations, Inc. declined 8.79% to $48.16 as housing market sensitivity and interest rate volatility began affecting demand forecasts for home security products.

Owens Corning slipped 8.57% to $130.40. The building materials manufacturer, tied closely to construction cycles, faces headwinds from elevated input costs and weaker-than-expected spring building season demand.

Powell Industries, Inc. dropped 8.04% to $174.88 after a strong rally this year. With infrastructure optimism priced in, investors rotated out of electrical solutions stocks amid delivery backlog concerns.

Why did Marvell Technology and Alphabet plunge?

Semiconductor stock Marvell Technology, Inc. fell 8.02% to $56.31, reversing part of its year-to-date gains. The slide follows investor caution over U.S. export controls on AI-related chips to China and a weaker near-term revenue outlook.

Alphabet Inc. saw one of the day’s biggest headline drops, with Class C shares (GOOG) down 7.51% and Class A shares (GOOGL) off 7.26%. Despite a strong Q1 performance, concerns over ad revenue exposure to Europe and potential fines from regulatory bodies in the EU weighed on sentiment.

How did other major decliners perform?

Jazz Pharmaceuticals plc declined 8.75% to $101.44, while Masimo Corporation fell 7.04% to $150.11, with both health stocks facing earnings-related volatility. Masimo, despite being up 34.5% over the year, was sold off heavily after product-specific sales underperformed forecasts.

International Flavors & Fragrances Inc. lost 7.08% to $73.59. While its trailing P/E stands at 77.46, inflation-driven cost increases and muted consumer demand hit the stock.

DoorDash, Inc. gave up 6.90%, ending at $176.99. Despite a 68% 12-month rally, investors appeared concerned about rising competitive pressure and the impact of urban delivery regulations in California and New York.

What trends hit China-linked and cloud stocks?

WeRide Inc. dropped 7.87% to $8.31 amid mounting pressure on autonomous vehicle firms due to shifting U.S.-China tech transfer regulations. Kingsoft Cloud Holdings Limited fell 7.55% to $14.08 despite being up nearly 373% in the past year. Profit-taking and growing uncertainty around Chinese cloud platform competitiveness contributed to the pullback.

GDS Holdings Limited slipped 6.66% to $26.19, also reflecting a deceleration in data center expansion sentiment after years of aggressive capex.

Which other companies were among the top losers?

Mueller Water Products, Inc. declined 6.64% to $23.64, likely impacted by reduced infrastructure bill optimism. Intapp, Inc., down 6.59% to $53.42, was hit by high-growth stock derating. Dayforce Inc. slipped 6.44% to $54.44, facing multiple analyst revisions on revenue quality.

Hesai Group gave up 6.31% to $16.19. Although still up 221.7% on the year, the lidar maker continues to face skepticism about margin expansion and U.S. market access.

American Financial Group, Inc. dropped 6.14% to $121.99, hit by insurance premium normalization trends. TransAlta Corporation, a Canada-based power generation firm, declined 5.96% to $8.52 despite its recent outperformance.

What broader market forces shaped the selloff?

The declines came amid growing investor anxiety around a fragile economic recovery, ongoing trade tensions, and the U.S. Federal Reserve’s policy pause. While inflationary pressures have moderated, renewed U.S.-China friction over AI chips, combined with volatile commodity prices and mixed corporate earnings, created a risk-off environment.

Additionally, market watchers cited a notable rotation out of speculative and growth names and into defensives and cash-equivalent assets. Several funds trimmed exposure to mid-cap technology and healthcare firms, with retail participation also weakening.

Sentiment Analysis: What are institutional investors signalling?

Institutional flows on May 7 showed a pullback from speculative equities across biotech, cloud services, and fintech. ETFs tracking high-growth tech segments, including ARK Innovation ETF, experienced net outflows. Buy-side analysts flagged increased hedging activity in options markets and a rise in short interest in names like Sarepta, DoorDash, and Upstart.

However, some long-only fund managers indicated potential re-entry zones for quality names like Alphabet and Masimo once earnings visibility improves. Overall, sentiment remains cautious, with an emphasis on earnings sustainability and geopolitical stability.

Outlook: Are these stocks oversold or signaling deeper concern?

The breadth and depth of the losses suggest a tactical correction, rather than a systemic selloff. However, the sectors affected—particularly healthcare, fintech, semiconductors, and housing-linked industrials—face persistent policy and macro challenges. The trajectory of inflation, tariff policies, and consumer spending will likely determine whether these stocks rebound or continue to face downward pressure in Q2.