"After an extraordinary rally around hopes for artificial intelligence that propelled global stock markets to record highs, fears that tech firms are now overvalued loom large. Investors are also braced for the release of a batch of official data on the state of the US economy, amid heightened uncertainty over its strength during the federal government shutdown. The benchmark S&P 500 and the Dow Jones industrial average each closed down 1.7% in New York on Thursday, while the tech-focused Nasdaq Composite dropped 2.3%."
"Nvidia, the $4.5tn tech company, led tech stocks lower. It declined 3.6% as it continues to grapple with the fallout from the disclosure by Japanese investor SoftBank that it had sold its entire stake in the firm for $5.8bn. There's a lot of uncertainties about the state of the economy, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York."
"With the longest US government shutdown in history now over after more than 42 days, federal officials are preparing to publish a string of highly anticipated economic data reports, including on jobs and inflation. Remarks by senior Federal Reserve officials meanwhile tested market confidence that the central bank is preparing to again cut interest rates at its upcoming meeting next month. We need to proceed and tread with caution, said Alberto Musalem, president of the Federal Reserve Bank of St Louis."
Wall Street weakened with the S&P 500 and Dow each down 1.7% and the Nasdaq down 2.3% as a technology sell-off intensified. AI-driven rallies that pushed markets to records fueled concerns that tech valuations are overstretched. Nvidia fell 3.6% after SoftBank disclosed the sale of its entire $5.8bn stake. Investors awaited a string of US economic reports on jobs and inflation following the 42-day federal government shutdown. Senior Federal Reserve officials signaled caution about near-term rate cuts, with Alberto Musalem urging careful steps. The Bureau of Labor Statistics aimed to publish employment data as soon as possible.
Read at www.theguardian.com
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