US markets struggle amid tech sell-off and economic uncertainty | Stock markets
Wall Street was under pressure on Thursday, experiencing its worst day in a month as selling of technology stocks intensified.
After an extraordinary rebound around hopes for artificial intelligence that sent global stock markets to record highs, fears of overvaluation of technology companies are mounting.
Investors are also bracing for the release of a series of official data on the state of the U.S. economy, amid heightened uncertainty about its strength during the federal government shutdown.
The benchmark S&P 500 and the Dow Jones Industrial Average each closed 1.7% lower in New York on Thursday, while the tech-focused Nasdaq Composite fell 2.3%.
Nvidia, the $4.5 billion technology company, led tech stocks lower. It fell 3.6% as it continues to deal with the fallout from Japanese investor SoftBank’s revelation that it sold its entire stake in the company for $5.8 billion.
“There is a lot of uncertainty about the state of the economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “What we are experiencing is a slight market correction in the AI sector and we are seeing a market rotation.”
With the longest U.S. government shutdown in history now over after more than 42 days, federal officials are preparing to release a series of highly anticipated economic data reports, including on employment and inflation.
The remarks by senior Federal Reserve officials also tested market confidence that the central bank is preparing to cut interest rates again at its next meeting next month. “We have to proceed with caution,” said Alberto Musalem, president of the Federal Reserve Bank of St. Louis.
Kevin Hassett, director of Donald Trump’s national economic council, said Thursday that the October jobs report would show how many jobs were created or lost in the labor market that month, but would not include the overall unemployment rate.
The Bureau of Labor Statistics stressed that it hoped to release the employment data “as soon as possible” but cautioned that it “may take time to fully assess the situation” before finalizing revised release dates.
