Tech Selloff and Economic Uncertainty Lead to Market Decline

U.S. stock markets recorded losses on Thursday as the tech sector selloff resumed, amid rampant economic uncertainty and concerns over high valuations. All major U.S. indexes ended the day lower, driven by anxieties over elevated stock prices, particularly in shares buoyed by artificial intelligence gains.

The Philadelphia SE Semiconductor index took a 2.4% hit, a notable decline underscoring tech dependency in market rallies. With market participants having to navigate dwindling economic indicators, following job market woes and continued government shutdown claims, the Federal Reserve remains undecided on imminent interest rate cuts.

Layoff announcements have soared as companies cite cost-cutting and AI efforts. Crucially, the Dow Jones fell 397.35 points, with consumer discretionary stocks contributing significantly to the S&P 500’s losses. Despite these headwinds, third-quarter earnings reports show promise, with an 83% beat rate among S&P 500 companies on Wall Street estimates.