A tumble in tech leads the stock sell-off as rate cut pessimism rises
Tech was the worst-performing sector ETF, and six of the Magnificent 7 stocks fell. Speculative stocks and momentum stocks were especially hard hit.
The S&P 500, Nasdaq 100, and Russell 2000 all fell hard as the longest government shutdown in US history came to an end and anxiety over backlogged data triggered pessimism that there won’t be a December rate cut. Traders are now pegging the odds of a cut at next month’s meeting at roughly a coin flip. (Comparatively, a month ago, the odds of another cut were 95.5%.)
Tech was the worst-performing sector ETF, and all of the Magnificent 7 fell except for Meta, which eked out a gain.
Goldman Sachs’ basket of high-beta momentum stocks, including Palantir and Applied Digital, suffered its worst day since President Trump’s April tariff announcement.
Speculative stocks tied to the AI boom, quantum computing, and energy, such as Oklo, CoreWeave, SoundHound AI, Tempus AI, D-Wave Quantum, IonQ, Rigetti Computing, Nebius, Cipher Digital, IREN , POET Technologies, Bloom Energy, and Plug Power, were also hard hit.
Stocks that moved higher:
Alibaba ticked up after Bloomberg reported that the e-commerce giant is set to overhaul its mobile AI app to become a fully functioning AI agent.
Cisco saw orders from AI hyperscalers accelerate in its most recent quarter, the company reported yesterday after the close, sending its shares higher.
Stocks that moved lower:
Flutter Entertainment, the parent of top US online sports betting app FanDuel, tumbled after it cut revenue guidance as part of a disappointing earnings report issued yesterday after the close.
The happiest place on Earth is feeling pretty meh today, as Disney dropped after its Q4 revenue missed Wall Street's estimates.
Tilray, Cronos Group, Canopy Growth, and other weed stocks dropped after lawmakers slipped a hemp THC ban into the government funding bill.
High-flying shares of tech hardware firms like Sandisk, Seagate Technology Holdings, and Western Digital — which make products to deal with the deluge of information and data expected to be produced by the AI database build-out — dropped after a Japanese competitor, Kioxia Holdings, reported a lackluster set of quarterly numbers.
Bitcoin dropped below $100,000 and treasury firms Strategy and Strive Inc. took a hit as confidence in the digital treasury play faltered.
