Wall Street Sells Off as AI Favorites Slide and Rate-Cut Odds Recede

- The S&P 500 fell 1.7%, the Dow lost 797 points (1.7%) and the Nasdaq dropped 2.3%, marking the worst day in about a month. - Tech and AI-linked shares led declines, with Nvidia and other recent highfliers retreating as investors questioned rich valuations and heavy AI capex plans. - Market-implied odds of a December Federal Reserve rate cut slid to roughly 47%–52% on CME FedWatch as recent Fed remarks tempered easing expectations. - The VIX jumped sharply intraday, up around 20% by mid-afternoon, and flows showed rotation away from growth mega-caps toward more defensive and value exposures. - The government reopened through Jan. 30 after a 43-day shutdown, but the White House and officials warned some October jobs and inflation data may be incomplete or unrecoverable, with Kevin Hassett saying the delayed jobs report may lack the unemployment rate.