Friday morning, U.S. stocks extended this week’s slide as investors dumped expensive tech and AI winners while dialing back confidence in a December Fed rate cut. The Nasdaq fell around 1%–1.8%, the S&P 500 about 0.8%–1.3%, and the Dow more than 500 points, following the worst single-day drop in over a month earlier in the week, according to CNBC and Business Insider market coverage.
Chipmakers and high-valuation AI names are bearing the brunt. Nvidia, AMD, Tesla, and Palantir extended losses after earlier declines of 6% or more, while Oracle’s sharp drop on worries about debt-fueled AI spending has become a symbol of investor unease with the most crowded trade on Wall Street. Bitcoin has sold off in tandem with growth stocks, sliding below $95,000 and more than 20% from its early-October peak, and crypto-linked equities from exchanges to miners are under pressure.
The catalyst is a rapid repricing of Fed expectations. Odds of a December quarter-point cut have slumped from roughly 95% a month ago to about 50% as more officials, including Neel Kashkari and Susan Collins, have signaled caution. A historic gap in official U.S. jobs and inflation data after the six-week government shutdown is adding to anxiety, with Fed Chair Jerome Powell likening policy-making in this environment to “driving in the fog.” That uncertainty is pushing investors toward Treasurys and gold and away from the most rate-sensitive, richly valued corners of the market.
For now, strategists characterize the move as a “healthy pullback” after an almost uninterrupted rally driven by AI and easing hopes. But broken technical patterns in many tech leaders, high overall equity valuations, and fragile confidence in continued rate cuts mean the path ahead could be choppy. Watch whether dip-buyers step in as the Nasdaq’s seven-week winning streak threatens to snap, or whether profit-taking broadens beyond mega-cap tech into the wider market.
