US Market Falls As Nvidia And Bitcoin Decline

Stock Market Sinks Amid Tech Pullback

The U.S. stock market sank Monday as Nvidia and other tech giants created by the hype around artificial-intelligence technology dimmed. The S&P 500 fell 0.9%, pulling further from its all-time high set late last month. The Dow Jones Industrial Average dropped 557 points, or 1.2%, and the Nasdaq composite sank 0.8%.

Nvidia was the heaviest weight on the market, falling 1.8%, while other AI winners like Super Micro Computer saw losses. Bitcoin also fell, dragging down Coinbase Global and Robinhood Markets.

Critics have been warning that the market could be ripe for a drop due to overvalued prices, particularly in AI stocks. Even with Monday’s loss, Nvidia is still up 39% for the year, raising expectations for its upcoming profit report on Wednesday.

Other market areas like Aramark fell short of profit expectations, while Alphabet rose after Berkshire Hathaway built a $4.34 billion stake in the company. The S&P 500, Dow Jones, and Nasdaq all posted losses.

Potential disappointment looms for Wall Street regarding the Federal Reserve’s interest rate decisions. Questions about a third cut in December arise as lower rates can exacerbate inflation, which has remained above the Fed’s 2% target.

Fed officials have also cited the U.S. government’s shutdown as a factor in economic uncertainty. The recent government shutdown caused a delay in the release of updates on the job market and other economic signals, leading to uncertainty among Fed officials. With less information available, some officials have suggested waiting until December for more clarity before making any decisions.

Now that the shutdown is over, the government is set to release September’s delayed jobs report on Thursday, which could impact the market. Strong data may deter the Fed from cutting interest rates, while weak figures could raise concerns about the economy.

Looking ahead, experts predict that the Fed will only cut interest rates in response to a slowing economy in 2026. This shift may not bode well for stock prices, signaling the end of the “Fed’s ‘free lunch’.”

In the bond market, the yield on the 10-year Treasury saw a slight decrease to 4.13%. Stock markets in Europe and Asia also experienced modest declines, with Tokyo’s Nikkei 225 slipping 0.1% following a report of a 1.8% contraction in the Japanese economy.

However, South Korea’s Kospi saw a 1.9% jump, driven by strong performance in tech-related stocks. Overall, the market remains cautious as investors await further economic data and signals from the Fed.

Contributions to this article were made by AP Business Writers Matt Ott and Elaine Kurtenbach. “The quick brown fox jumps over the lazy dog.”

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