US Stock Market Today: Dow Jones Dips 0.6% & NASDAQ Slips 1.8%, as Tech Valuations Face Scrutiny and Shutdown Delays Key US Data

Global equity markets pulled back as investors reduced risk after a strong multi-week rally. The S&P 500 fell more than 1% in early New York trading, while the NASDAQ 100 dropped about 1.8%, putting both benchmarks on track to end a three-week winning streak. The Dow Jones Industrial Average also edged down by 0.6%, while the Russell 2000 small-cap index declined by 1.4%.

European and global benchmarks followed the same pattern. The Stoxx Europe 600 slipped, and the MSCI World Index also weakened. A key gauge of mega-cap technology names, the Bloomberg Magnificent 7 Total Return Index, recorded a steeper loss. The Cboe Volatility Index hovered near 21, which signaled stronger demand for protection against equity swings.

In other asset classes, bond markets showed only modest moves. The yield on 10-year US Treasuries held close to 4.09%, while two-year Treasuries traded near 3.55%. Long-dated US debt saw yields around 4.70%. German and UK 10-year yields moved slightly higher, reflecting cautious sentiment but not a sharp repricing.

Currency trading pointed to a softer dollar. The Bloomberg Dollar Spot Index slipped about 0.2%. The euro traded near $1.16, the British pound moved above $1.31, and the Japanese yen held near ¥153 per dollar. Bitcoin hovered close to $101,000 after a volatile week, while Ether traded near $3,300. West Texas Intermediate crude stayed near $60 a barrel, and spot gold price approached $4,000 an ounce.

Government shutdown and labor market concerns drive rate expectations

The US government shutdown disrupted the normal flow of economic data and increased uncertainty around near-term growth. Officials did not release the monthly nonfarm payrolls report, so investors turned to private indicators for guidance on the labor market and interest rate outlook.

Data from Challenger, Gray, and Christmas showed that companies announced the highest number of October job cuts in more than two decades. Firms continued to restructure as they managed costs and integrated artificial intelligence into operations. Strategists noted that the labor market now cools from a position of strength rather than entering a sharp contraction.

Glen Smith of GDS Wealth Management argued that softer labor figures still allow the Federal Reserve to proceed with rate cuts in December and into early 2026. He said current trends do not yet point to an imminent recession. At the same time, presidential economic adviser Kevin Hassett estimated that the shutdown could cut expected fourth-quarter US growth roughly in half, underlining the fiscal drag from the political stalemate.

Technology and valuation focus

Technology and AI-linked stocks came under pressure as investors reassessed lofty valuations. Shares in key beneficiaries of the AI rally, including Palantir Technologies, Super Micro Computer, and Qualcomm, moved lower after their latest results and guidance did not fully meet elevated expectations.

A benchmark tracking the “Magnificent Seven” mega-cap technology companies fell about 1.5%. That decline weighed heavily on the NASDAQ 100 and put the index on course for its worst week since April. Technical indicators also started to warn of stretched conditions after a powerful run from recent lows.

Positioning in the sector added to concerns. Hedge fund manager Michael Burry disclosed bearish wagers on Palantir and NVIDIA. Those positions fueled debate over whether AI valuations can remain at current levels without stronger earnings support. Some market strategists still see opportunities for selective buyers after the pullback, but they warn that upside may now appear more limited.

Tesla shares slipped even after shareholders backed a $1 trillion compensation package for Chief Executive Officer Elon Musk. The plan ranks as the largest potential payout for a corporate executive. However, Musk must still meet demanding performance and market-value milestones before he can fully realize the award.

Corporate news developments

• US airlines started to cancel flights for the coming days as the government shutdown strained air-traffic operations and travel planning.

• NVIDIA CEO Jensen Huang stated that the company does not hold active talks to sell its Blackwell AI chips to Chinese customers.

• Apple reported a brief outage on its streaming service soon after the launch of its new series “Pluribus”.

• Tesla’s CEO said he expects Chinese regulators to approve the company’s advanced driver-assistance functions that mirror Full Self-Driving in the US.

• KKR reported its strongest fundraising quarter in more than four years on demand for credit strategies, while it plans to return $350 million to investors in an underperforming Asia fund.

• PNC Financial Services increased its planned investment in physical branches as it competes more aggressively for deposits in faster-growing US regions.

• Comcast entered talks to buy ITV’s media and entertainment arm, a potential deal that could reshape the UK broadcasting market.

• Constellation Energy cut its full-year outlook after earnings fell short of expectations, while Brookfield Asset Management reported record quarterly earnings driven by infrastructure, transition, and credit platforms.

• Sweetgreen reduced its revenue guidance after weaker-than-expected demand, and Six Flags lowered its outlook again and booked a $1.5 billion charge.

• Wendy’s reported sales that declined less than analysts predicted, supporting the trend of fast food chains holding up as consumers adjust their spending.

Market sentiment remains cautious as tech valuations cool and the US shutdown clouds economic visibility. Investors now await labor data and Fed cues to gauge whether the recent pullback marks a pause or a deeper correction.

Also Read: US Stock Market Today: S&P 500 Falls 0.9% & NASDAQ Dips 1.6%, as Tech Weakness and Labor Market Slowdown Boost Fed Cut Bets