FX.co ★ US Stocks Tumble on Thursday

On Thursday, U.S. stocks experienced a notable decline. The S&P 500 fell by 1.5%, the Nasdaq decreased by 1.9%, and the Dow relinquished its recent record gains, dropping 1.5%. This downturn was largely driven by a broad sell-off in companies linked to artificial intelligence and diminishing expectations for immediate monetary policy easing by the Federal Reserve. Market participants significantly adjusted the likelihood of a 25 basis point rate cut in December, reducing it from approximately 95% a month ago to around 50%. This shift followed cautionary remarks from several Federal Reserve officials regarding further easing in the face of persistent inflation and data inconsistencies emerging from a government shutdown. Key technology stocks, including Nvidia, Broadcom, Oracle, and Palantir, led the losses in the tech sector, experiencing declines ranging from about 3.6% to 6.5% as investors opted to secure profits. Additionally, Disney's shares plummeted by 7.8% following a mixed fourth-quarter performance; the company surpassed earnings expectations but fell short on revenue, exacerbating existing vulnerabilities within the communication services sector. The reevaluation of interest rates diminished the appeal of high-growth stocks with elevated valuations, transforming profit-taking into a more extensive market downturn.