Nasdaq Tanks More Than 2% as Traders Dump Tech on Shifting Fed Forecast

Why is the Stock Market Down Today?

U.S. equity markets posted their worst day in over a month on Thursday, , as rising Treasury yields and shifting rate expectations triggered a broad tech-led selloff.

The Dow Jones Industrial Average fell 797.60 points, or 1.65%, to close at 47,457.22. The S&P 500 dropped 113.43 points, or 1.66%, to finish at 6,737.49. The Nasdaq Composite plunged 536.10 points, or 2.29%, to settle at 22,870.36.

What drove today’s decline?

Hawkish remarks from Federal Reserve officials dramatically reduced the odds of a December rate cut. Just a month ago, traders had priced in a 95% chance of easing. That probability has now collapsed to roughly 50%. Fed speakers signaled that inflation remains too persistent and that rates may need to stay elevated, prompting a broad reassessment of risk across markets.

Why did tech lead the losses?

High-valuation tech and AI-related names led the pullback. Nvidia fell over 3.5%, while Tesla dropped more than 6%, leading declines among the “Magnificent Seven.” These growth-heavy stocks, which have fueled much of this year’s rally, are especially sensitive to rising yields and less favorable monetary policy.

Disney added to the drag on communication services, falling nearly 8% after reporting weaker-than-expected fourth-quarter earnings. Bitcoin also dropped below $100,000, as risk-off sentiment extended beyond equities into crypto.

How is the data situation impacting markets?

The end of the 43-day government shutdown cleared the way for economic reports to resume. However, the White House warned that October’s key data — including inflation and jobs — may never be released or remain permanently impaired. This uncertainty has left traders uneasy heading into the next round of policy discussions.

Where is money rotating?

Defensive sectors such as utilities and consumer staples outperformed on a relative basis, though they still posted losses. Financials and healthcare held up better, indicating a cautious rotation into value and lower-beta sectors as traders trimmed risk in high-growth positions.

What to expect Friday

With little new economic data expected and lingering uncertainty around key missing reports, traders will likely continue focusing on bond yields, Fed commentary, and sector performance.

The tech sector remains the key battleground. If weakness continues, it could deepen the broader market decline. On the other hand, signs of stabilization in rate-sensitive names or a shift in Fed tone could support a rebound.

Volatility remains elevated, and positioning into the weekend may reflect growing caution as the market weighs whether this is a pullback — or the start of something larger.

More Information in our Economic Calendar.