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Wall Street Slumps as Fed Cut Odds Recede and AI Leaders Slide

Freshly hawkish Fed signals pushed investors to rethink lofty AI valuations, trimming the odds of a December rate cut.

dow dives 800 points as government opens stock market today
The exterior of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, D.C., U.S., June 14, 2022. REUTERS/Sarah Silbiger
U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
PolyMarket CEO Shayne Coplan, right, and UFC CEO Dana White pose for a picture on the floor of the New York Stock Exchange in New York, Thursday, Nov. 13, 2025. (AP Photo/Seth Wenig)

Overview

  • The Dow fell nearly 800 points, the S&P 500 lost about 1.7% and the Nasdaq dropped 2.3%, marking the worst day for major indexes in about a month.
  • CME FedWatch showed trader odds for a December rate cut falling to roughly a coin flip as Treasury yields ticked higher, with the 2‑year near 3.60% and the 10‑year around 4.11%.
  • Losses concentrated in AI and large-cap tech after reports that SoftBank exited its Nvidia stake, pressuring Nvidia and other chip and cloud names as investors rotated toward value and defensives.
  • The 43‑day U.S. government shutdown ended, yet officials warned key October indicators may be incomplete, including the unemployment rate that relies on a missed household survey.
  • Volatility spread overseas, with Asia-Pacific indexes sliding on Friday, including Japan’s Nikkei down about 1.8% and South Korea’s Kospi off roughly 2.3%.