US Stocks Plunge: Nasdaq 100 and Small Cap 2000 Lead Decline
The US stock market experienced significant declines today, led by the Nasdaq 100 and Small Cap 2000 indices. Key tech stocks faltered, contributing to the overall downward trend. Market volatility increased as traders shifted away from high-valuation technology shares in response to the reopening of the US government after a 43-day shutdown.
Market Overview
The Nasdaq 100 fell nearly 2%, while the Small Cap 2000 dropped 1.60%. In contrast, other major indices also reported losses:
- Nasdaq Composite: 22,997.79, down 1.75%
- S&P 500: 6,776.03, decrease of 1.09%
- Dow Jones: 47,873.64, decline of 0.79%
Impact of the Government Reopening
The recent reopening of the US government created uncertainties for investors. Delayed inflation and employment reports were mentioned, with the White House indicating that some data may never be released. This uncertainty complicates expectations for the Federal Reserve’s December meeting, altering the odds of a potential rate cut.
Shifts in Trader Sentiment
Investors showed a marked rotation away from technology-focused stocks. High-profile stocks such as Nvidia and Tesla dropped approximately 4% and 6%, respectively. Other declines included:
- Alphabet: down around 5%
- Broadcom: fell about 5%
- Disney: plunged 9% after reporting weaker revenue
Economic Forecast and Rate Cuts
Analysts warned that the government shutdown could reduce GDP by approximately $11 billion by 2026. A month ago, the expectation for a December rate cut was nearly 95%, but today it stands at 50%. Higher Treasury yields further pressured technology stocks and increased market volatility.
Corporate Earnings Trends
Despite the general downturn, Cisco provided a positive highlight, gaining over 4% due to strong demand in AI and increased profit forecasts. In stark contrast, weak performance from Disney and other leading tech firms accelerated declines across major indices.
Conclusion
Overall, the market’s shift away from technology stocks towards lower-valuation sectors shows a cautious approach from investors. Expect continued volatility as clear economic signals remain elusive and uncertainty looms over future Federal Reserve policy decisions. The Nasdaq 100 remains particularly vulnerable in this challenging environment.
