NEW YORK — U.S. stocks plunged on Thursday, posting their sharpest losses in over a month, as investors dumped technology shares and reassessed expectations for Federal Reserve rate cuts amid renewed volatility and a lack of fresh economic data.
The Dow Jones Industrial Average fell 798 points, or 1.65%, after closing above 48,000 for the first time ever on Wednesday. The S&P 500 dropped 1.66%, and the Nasdaq Composite slid 2.29%, marking the worst day for all three indexes since October 10, when U.S.-China trade tensions rattled markets.
The sell-off deepened Thursday afternoon as investor sentiment deteriorated. With third-quarter earnings season winding down, markets lacked fresh catalysts and became more vulnerable to shifts in mood. “It just had such a monstrous run that it just made sense to take the profits and find other opportunities,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, who noted he recently trimmed his tech exposure.
Technology stocks led Thursday’s retreat. Tesla shares fell 6.6%, Palantir dropped 6.5%, Nvidia lost 3.6%, and Oracle declined 4.15%. The tech-heavy Nasdaq has now fallen nearly 5% since closing at a record high on October 29, shedding almost 2 trillion dollars in market value. “Investors are reevaluating the prices they’re paying for big tech and AI stocks,” said Ross Mayfield, an investment strategist at Baird.
Walt Disney shares tumbled 7.8% after the company reported earnings that failed to meet Wall Street’s expectations. The entertainment giant’s results were seen as underwhelming despite growth in its streaming division, adding to the broader market’s unease. Meanwhile, investors rotated into sectors like financials and health care, which had lagged behind during the tech rally but now appear more attractively valued.
Bitcoin also slumped Thursday, falling roughly 3.3% to trade around 98,250 dollars. The cryptocurrency has struggled to regain momentum after peaking above 126,000 dollars in early October. Analysts say the recent pullback reflects broader risk-off sentiment and uncertainty around digital asset regulation.
The Federal Reserve remains a central focus for investors. With the government shutdown now over, attention has turned to the backlog of delayed economic data — including inflation and jobs reports — that could influence the Fed’s next move. “Lacking fresh economic data, markets have become increasingly jittery in recent weeks,” said Seema Shah, chief global strategist at Principal Asset Management.
President Donald Trump signed a funding bill late Wednesday, ending the longest government shutdown in U.S. history. The resolution is expected to restart the flow of key economic indicators, which had been paused for weeks and left policymakers and investors in the dark. “The gears of the government should be working again soon, and while that is a relief for markets and the economy, there is still plenty of uncertainty, particularly around the missed inflation and jobs data and how these fronts have been faring,” said Carol Schleif, chief market strategist at BMO Private Wealth.
The Fed’s rate cuts in September and October helped provide a tailwind for stocks. But investors could get spooked if central bankers hold rates steady in December due to delayed data and a cloudy view of the economy. “If sticky inflation forces the Fed to maintain restrictive policy, the cost of capital remains a headwind for valuations,” said David Miller, chief investment officer at Catalyst Funds.
Bond markets reflected the shift in sentiment. The yield on the 10-year U.S. Treasury note rose to 4.65%, as investors moved into safer assets and recalibrated expectations for monetary policy. European markets also followed Wall Street’s lead, with Germany’s DAX and the U.K.’s FTSE 100 both closing lower. Analysts say upcoming Fed speeches and the release of delayed inflation data could determine whether the recent volatility persists into year-end.
Warren Buffett, in his final annual letter as CEO of Berkshire Hathaway, criticized the culture of excessive executive compensation, calling it a reflection of “envy and greed.” While he didn’t name Elon Musk directly, the remarks followed Tesla shareholders’ reapproval of Musk’s controversial 1 trillion dollars pay package. Musk defended the deal, urging investors to “hang on to your Tesla stock” and emphasizing long-term growth potential. Their contrasting views have fueled broader debate over tech valuations, leadership accountability, and the sustainability of market momentum.
To visualize the scale of the Nasdaq’s decline and the investor rotation underway, analysts point to a nearly 5% drop in the index since October 29 — a loss of roughly 2 trillion dollars in market value. A comparative chart shows steep declines in tech stocks like Tesla, Palantir, Nvidia, and Oracle, while financials and health care stocks such as JPMorgan Chase and UnitedHealth Group posted modest gains. The shift underscores a growing preference for value-oriented sectors amid macroeconomic uncertainty.
While Wall Street reeled on Thursday, global markets moved in different directions. The London Stock Exchange posted modest gains, buoyed by strong earnings and stable inflation data. In contrast, China’s Shanghai Composite rose 0.73% and the Shenzhen Component jumped 1.78%, lifted by optimism around government support for clean energy firms. The divergence highlights how regional factors — from central bank policy to sector-specific momentum — shaped investor behavior across continents, all within the same trading day.
