U.S. stocks saw their steepest slide in over a month on Thursday, as Wall Street was rattled by heavy losses in Nvidia and other leading artificial intelligence names. Persistent inflation concerns and growing uncertainty among Federal Reserve policymakers regarding the trajectory of the U.S. economy prompted investors to temper expectations for imminent interest rate cuts.
The Dow Jones Industrial Average shed 798 points, a decline of 1.65%. The benchmark S&P 500 also retreated by 1.66%, while the Nasdaq Composite slumped 2.29%, weighed down by sharp declines in major technology stocks.
Investor sentiment was dragged lower after recent remarks from several Federal Reserve officials suggested a cautious stance on cutting rates further. As a result, market-based probabilities for a reduction in borrowing costs by December have now dropped to nearly 50%, falling from more than 95% in mid October, according to CME FedWatch Tool.
Stocks that have been top performers in the recent AI-driven rally led the pullback. Nvidia closed down 3.6%, while Tesla shares tumbled 6.6%, as concerns mounted over lofty valuations.
Meanwhile, uncertainty looms over key economic data releases. According to the White House, the delayed reports for September—crucial for assessing employment and inflation—might start emerging as early as next week. However, the release of the October jobs and inflation data remains in question, as both reports require data collection activities that were postponed last month.
Economists have urged the U.S. Labor Department to prioritize the completion of November’s employment and inflation figures when government operations resume. Up-to-date data is deemed critical for Federal Reserve policymakers ahead of their key December meeting.
