Wall Street's primary indices opened in the red on Tuesday as hotter-than-expected inflation figures for October dampened market sentiment. The retreat interrupted a two-day rebound for technology stocks, with investors expressing renewed concern that the Federal Reserve might maintain elevated interest rates for an extended period.
Federal Reserve Governor Christopher Waller indicated that the central bank should consider raising rates by at least 25 basis points next month, even if inflation showed signs of moderation. He added that policymakers might weigh a 50-basis-point increase if price pressures were found to be accelerating. James McCann, a senior economist at Edward Jones, noted that markets had recently been pricing out some tightening, but the latest data has forced a reassessment of the Federal Reserve’s path.
Technology stocks faced particular pressure, with Nvidia shares declining 4.4% following reports of allegations involving CEO Jensen Huang and the shipment of $7.5 billion worth of chips to Chinese firms. The Philadelphia Semiconductor Index also fell 0.9%, ending two consecutive sessions of gains. In the broader market, nine of the 11 major S&P 500 sectors traded lower, with utilities and real estate among the primary laggards, while financials saw a marginal gain of 0.15%.
Investors are also shifting focus toward the upcoming public listing of Anthropic. The AI firm revealed plans for an initial public offering that could raise up to $64.4 billion, potentially valuing the company at $1.4 trillion. Meanwhile, Skydance shares dropped 9% after the media company warned that the underperformance of Warner Bros’ film slate could impact fourth-quarter profits by as much as $200 million.
Key facts
- The Dow Jones Industrial Average fell 257.10 points, or 0.49%, to 52,132.65.
- The S&P 500 declined 45.94 points, or 0.61%, reaching 7,504.00.
- The Nasdaq Composite dropped 188 points, or 0.74%, to 25,065.14.
- Declining stocks outnumbered advancers on the New York Stock Exchange by a ratio of 4.01 to 1.
- Brent crude futures fell below $90 a barrel for the first time since August.
Why it matters
The uncertainty surrounding Federal Reserve policy and the sustainability of the artificial intelligence boom has introduced increased volatility into the US markets. Investors are closely watching upcoming quarterly results from firms like CoreWeave to gauge the broader health of the tech sector.
Source: Economic Times
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