Nasdaq 100 and S&P500: Tech Stocks Drop as Fed Dampens Cut Forecast

Stocks Fall as Megacaps Slide, Powell Pushes Back on Cut Bets

Markets are under pressure Thursday as traders digest hawkish signals from the Fed and a sharp selloff in megacap tech. The Nasdaq is down nearly 0.8% and the S&P 500 is off 0.3%, while the Dow is bucking the trend, up 0.5% on strength in financials and industrials.

With Meta plunging and Microsoft underperforming, buyers are staying cautious ahead of tonight’s key earnings from Apple and Amazon.

Is the Fed Putting a December Cut in Doubt?

The Fed delivered the expected 25 bp cut, but Powell’s tone didn’t leave much room for more easing this year. Markets got the message. The odds of another cut in December have dropped to 72.8%, according to CME’s FedWatch — down from over 90% a week ago. The reaction has been broad: bonds, gold, and equities sold off together Wednesday and are still finding their footing today. Traders aren’t chasing the dip — not yet.

How Much Damage Did Meta and Microsoft Do?

Plenty. Meta is down over 10% after earnings and news it’s planning a $25 billion bond sale — a move that caught the market off guard. Microsoft is down 2.5%, adding to tech sector weakness. Combined, they’re weighing heavily on the Nasdaq and the S&P 500’s tech sector, which is down 1.04% mid-session.

Communication services and consumer discretionary are also trading lower. Chipotle is getting hit hard, down more than 15%, while eBay has dropped 14% post-earnings. The selloff in these names is dragging discretionary stocks 1.2% lower.

What Sectors Are Actually Working?

Financials are leading, up 1.04%, with bank names responding well to the pickup in yields. Health care, real estate, and industrials are all in the green too. Cardinal Health is up 13%, while CH Robinson is jumping 21% after strong earnings. Other notables: AMETEK (+7.5%), L3Harris (+5.7%), and Bristol-Myers (+6.4%).

Even in a mixed session, pockets of earnings-driven strength are getting rewarded — but it’s highly selective.

What’s the Market Saying Heading Into the Close?

Positioning feels cautious. With Apple and Amazon set to report after the bell, no one’s in a hurry to load up. The S&P 500 is struggling to hold recent gains, and the Nasdaq looks heavy. If those two names disappoint, this could turn into a deeper pullback. But if they deliver, especially on guidance, expect a quick shift in tone. Either way, the next move hinges on what comes after hours.

More Information in our Economic Calendar.