Investors reassess tech giants as job cuts surge and policy uncertainty rattles global markets
Soaring valuations in artificial intelligence and technology stocks triggered a sharp selloff in US markets Thursday, as investors reassessed the risks of “priced for perfection” equities amid mounting economic uncertainty, according to CNBC.
The Dow Jones Industrial Average fell 398.70 points (0.84 percent) to 46,912.30, while the S&P 500 dropped 1.12 percent to 6,720.32, and the Nasdaq Composite tumbled 1.9 percent to 23,053.99.
The Nasdaq 100 is on track for its worst week since early April, with the S&P 500 technology index down 2 percent and the Philadelphia SE Semiconductor index off 2.4 percent, as reported by Reuters.
Leading the declines were AI and semiconductor names such as Nvidia, Microsoft, Palantir Technologies, Broadcom, and Advanced Micro Devices.
Qualcomm shares shed nearly 4 percent after the company warned of potential future business losses with Apple, despite posting strong quarterly results.
AMD dropped 7 percent, while Palantir and Oracle fell nearly 7 percent and 3 percent, respectively.
Meta Platforms also retreated, as noted by CNBC.
Market participants are increasingly concerned that recent gains have been driven by a narrow group of high-valuation stocks.
Mike Mussio, president at FBB Capital Partners, told CNBC that “so much of this stuff from a valuation standpoint was so lofty and priced for perfection.”
He added that the market is seeing “a bit of a dichotomy between companies that are beating and raising versus those that maybe are beating on the top line but providing tepid guidance on the bottom line or from an operating profit standpoint.”
US labour market data further weighed on sentiment.
US-based employers announced more than 153,000 job cuts in October, nearly triple September’s rate and the highest for the month in 22 years, as per Challenger, Gray & Christmas and cited by CNBC.
The ongoing US government shutdown, now the longest in history, has limited the availability of official economic data, prompting investors to focus on private reports.
Globally, the risk-off mood extended to European and Asian markets.
The pan-European STOXX 600 index fell 0.7 percent, and MSCI’s gauge of global stocks declined 0.59 percent.
The British pound strengthened after the Bank of England narrowly voted to hold its benchmark rate at 4.0 percent, while US Treasury yields and the dollar both slipped as investors weighed the implications of weak labour data and policy uncertainty, according to Reuters.
Investors are also monitoring the US Supreme Court’s deliberations on the legality of recent trade tariffs, which could have significant implications for federal revenues and market stability, as reported by CNBC.
Oil prices edged lower, with US crude settling at US$59.43 a barrel and Brent at US$63.38, reflecting ongoing concerns about oversupply, according to Reuters.
