Stocks in the United States fell sharply today. Major technology companies in the artificial intelligence sector, led by Nvidia, recorded significant losses. Investors lowered their expectations for interest rate cuts due to inflation concerns and disagreements among members of the monetary committee on the health of the US economy.
Uncertainty from the Fed and government shutdowns
The Dow Jones index fell 797.6 points, or 1.65 percent, to 47,457.22 points. The broader Standard & Poor’s 500 index fell 113.43 points, or 1.66 percent, to 6,737.49 points. The Nasdaq technology market index fell 536.1 points, or 2.29 percent, to 22,870.36 points. The US government resumed operations today. The federal government shutdown lasted a record 43 days, worrying investors and disrupting the flow of economic data, among other things.
In recent days, more and more representatives of the US central bank (Fed) have signaled hesitation about whether to further cut interest rates. This has pushed down the probability of an interest rate cut in December. Traders now give a 47 percent chance that the Fed will cut interest rates by a quarter of a percentage point in December. Last week, they gave this cut a 70 percent chance. “There are many uncertainties about the state of the economy. We are going through a market correction in the artificial intelligence sector and are witnessing market rotation,” said Peter Cardillo, an analyst at Spartan Capital Securities.
Nvidia, Tesla, and Broadcom down, dollar weakens, euro strengthens
Companies that have posted significant gains in recent years lost ground. Nvidia, Tesla, and Broadcom all recorded losses. On the other hand, Cisco Systems shares strengthened after the company raised its full-year profit and revenue forecast thanks to demand for its networking equipment, Reuters reported.
The US dollar fell against a basket of currencies today. This was due to the resumption of federal government operations, which improved investors’ willingness to take risks. The exchange rate is also affected by uncertainty surrounding the future development of interest rates in the US. The dollar index, which tracks the performance of the dollar against a basket of six major world currencies, fell 0.3 percent to 99.19 points. The euro strengthened 0.4 percent against the dollar to USD 1.1632. The dollar weakened 0.1 percent against the yen to JPY 154.55. The euro strengthened 0.3 percent against the yen to JPY 179.78.
Source: Reuters
