U.S. stocks are heading into one of their worst days since the spring sell-off NVIDIA and others AI superstar stocks The decline continued on Thursday amid concerns that prices were too high. Wall Street also questions whether the rate cuts it’s counting on will actually happen.
S&P 500 fell 1.5%, pulling further lower record high Ordered at the end of last month. It was on track for its worst day in a month and its second-worst day since a plunge in April after President Donald Trump shocked the world by declaring “Liberation Day” tariffs. this Dow Chemical The Jones Industrial Average fell 565 points, or 1.2% own records Set the day before, while Nasdaq As of 1:29 p.m. ET, the composite index was down 2.4%.
NVIDIA After falling 4.7%, chip companies became the heaviest weight in the market. Other AI darlings are also in trouble, with Artificial Intelligence falling 7.6% super microcomputer6.6% is Palantir Technology 4.7% Broadcom.
Questions are growing about how much more superstar AI stocks can add to their already impressive gains. For example, earlier this month, Palantir’s year-to-date gains were an impressive 174%.
Such a sensational performance is one of the main reasons why the U.S. market hit records, although Job market slows and high inflation. Artificial Intelligence Stocks The price is already so highHowever, they are also painting Comparison to the Internet Bubble of 2000 It eventually broke out and dragged the S&P 500 down nearly half its value.
Meanwhile, stocks fell on Wall Street as traders worried the Federal Reserve might not cut interest rates again in December as they have long assumed.
Wall Street likes rate cuts because they boost the economy and investment prices, although they can also increase inflation. Halting the cuts could weaken prices in U.S. stocks, which have hit record highs in part on expectations of a series of further cuts.
Expectations that the Fed will cut interest rates at its next meeting in December have fallen sharply in recent days. Traders now believe the probability of this happening is smaller than a coin toss, at 47.6%, down from nearly 70% a week ago, according to the data. CME Group.
Recent comments from Fed officials have fueled skepticism.
Boston Fed President Susan Collins said late Wednesday that it may be appropriate to keep interest rates steady “for some time.” This is a change for her speech last monthwhen she backed another cut.
The Fed’s job has become more difficult recently due to U.S. government policies. Stop work for six weeksdelayed a lot Important updates on the job market and other signals About economic strength.
Stocks mostly rose during shutdowns, as often happens in historyBut Wall Street is bracing for potential volatility as the government reissues these updates. The worry is that data can convince Fed Stop cutting interest rates, which could boost the economy but also increase inflation. Wall Street has
Global equity strategist Doug Beath said “the looming data deluge could trigger further volatility in the coming weeks.” Wells Fargo Investment Institute.
On Wall Street, Walter disney Co. helped lead the market lower after falling 7.8%. entertainment giant Report latest quarterly profit That beat analysts’ expectations, but its revenue fell short of forecasts.
This helped offset a 4.9% rise Cisco Systems The tech giant’s profit and revenue beat analysts’ expectations.
In the bond market, U.S. Treasury yields rose, putting downward pressure on the prices of stocks and other investments.
The 10-year Treasury yield rose to 4.10% from 4.08% Wednesday night.
In foreign stock markets, European stock indexes fell after Asian stock indexes edged higher.
Tokyo’s Nikkei 225 rose 0.4%, although Japan’s tech giants SoftBank Group It fell another 3.4%. It has been struggling since it said earlier this week Already sold Its entire stake in Nvidia is worth $5.8 billion.
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Associated Press writers Teresa Cerojano and Matt Ott contributed.