Washington, Nov 14 US stock markets dropped sharply on Thursday as big technology companies lost value and investors grew nervous ahead of important economic reports due in the coming days.
The major US indexes, which track the performance of the country’s largest publicly traded companies, all ended the day lower. The S&P 500 fell 1.7 per cent, while the Nasdaq Composite, which includes many tech firms, dropped 2.1 per cent.
The decline was led by Nvidia, the world’s most valuable technology company, which dropped 3.5 per cent. The company has been under pressure since Japanese investor SoftBank disclosed it had sold its entire $5.8 billion stake. The news added to concerns that some large tech companies may now be overvalued after months of rapid gains linked to excitement over artificial intelligence.
Investors are also waiting for several US government reports that could show how the economy is performing. Some of that data has been delayed or affected by the recent federal government shutdown. The Trump administration said the upcoming October jobs report will be missing some information because the shutdown interrupted data collection.
Signals from officials at the US central bank, the Federal Reserve, also unsettled markets. For them, the inflation remains a concern and interest rates could stay high for longer than expected.
Kevin Hassett, National Economic Council Director, said that today’s losses were primarily due to the uncertainty over interest rate cuts.
“The story of today is that it's because markets are thinking that the Fed is less likely to cut rates,” he noted.
The drop in stocks was accompanied by declines in other riskier assets. Bitcoin, for example, fell below $100,000 and is down more than 20 per cent since early October.
US Treasury yields rose, with the 10-year yield climbing to 4.12 per cent, while the dollar weakened.
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