U.S. Stocks Close Monday Lower on Tech Selloff
The Dow Jones Industrial Average plummeted 557.24 points—a 1.18% slide—settling at 46,590.24 by the closing bell.
The tech-heavy Nasdaq shed 192.51 points, finishing 0.84% lower at 22,708.07, while the S&P 500 retreated 61.70 points, or 0.92%, landing at 6,672.41.
Market turbulence intensified as the Volatility Index (VIX)—Wall Street's so-called "fear index"—surged 12.86% to reach 22.38.
Market participants are bracing for a critical Wednesday release: semiconductor powerhouse Nvidia's earnings report. Thursday brings equally significant news with September's labor market figures, postponed following the federal government shutdown.
Nvidia shares slid 1.8% Monday as traders positioned ahead of the chipmaker's third-quarter financial disclosure. Mounting concerns over excessive valuations have recently hammered the semiconductor giant alongside broader large-cap technology stocks.
Bucking the downturn, Alphabet shares rallied 3.1% among major technology names after revelations that Warren Buffett's Berkshire Hathaway had taken a position in Google and YouTube's parent company.
Thursday's nonfarm payrolls release marks the first economic data to emerge from the blackout period triggered by the federal government shutdown, making September's employment figures particularly consequential for market watchers.
The employment data will serve as critical input for Federal Reserve policymakers as they chart monetary policy direction heading into December's meeting, where market expectations for rate reduction have recently cooled.
CME FedWatch data revealed traders assigned just a 44.9% probability to a 25-basis-point December rate cut on Monday—a sharp retreat from the previous week's 63.8% odds.
Wall Street remains fixated on commentary from Fed officials. Fed Vice Chairman Philip Jefferson stated that last month's 25-basis-point interest rate cut was an appropriate step, given the increasing risks to the labor market and the recent slight decrease in inflation risks. He said that future interest rate cuts should proceed slowly.
Fed Board Member Christopher Waller said he was not concerned about accelerating inflation or rising inflation expectations and that his focus was on the labor market. Waller stated that after months of weakness, this week's September employment report or other data releases in the next few weeks were unlikely to change his view that another interest rate cut is necessary.
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