Shares of software supply chain platform JFrog (NASDAQ:FROG) fell 4.7% in morning trading on January 8, 2026, as part of a broader market rotation out of the technology sector.
The decline came amid profit-taking in high-growth tech stocks following a strong recent rally, particularly in artificial-intelligence-related names.
The move reflected a wider trend, with the Nasdaq Composite experiencing the sharpest pullback among major indices as investors locked in gains from the prolonged AI-driven surge.
Multiple reports highlighted a shift in sentiment, with capital flowing out of overvalued growth sectors.
Defense stocks emerged as the primary beneficiaries of this rotation, rallying sharply after President Trump proposed a $1.5 trillion defense budget for fiscal 2027—a significant increase from the $901 billion allocated for 2026.
Major contractors led the gains, with Northrop Grumman advancing around 8% to 10% and Lockheed Martin rising nearly 8% in intraday trading.
The surge in aerospace and defense names helped offset tech weakness, leaving the S&P 500 relatively flat and supporting modest gains in the Dow Jones Industrial Average.
A rebound in crude oil prices further bolstered energy-related heavy industry plays, reinforcing the rotation into cyclical and value-oriented sectors.