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Global markets took a cautious turn after megacap technology names retreated. The S&P 500 dropped 0.7% by late morning in New York, and the NASDAQ 100 slid 1.3%, while the Dow Jones Industrial Average held steady. The decline followed disappointing earnings from firms such as Broadcom and Oracle that tempered enthusiasm for artificial intelligence, leading traders to rotate toward smaller‑capitalization and value stocks.
Market watchers noted that the equal‑weighted version of the S&P 500, which gives smaller companies equal weight to giants like Apple, advanced even as the main index slipped. The shift points to rising demand for diversity across sectors and a move away from highly valued technology names.
NVIDIA and Alphabet led the pullback among the megacaps, highlighting growing skepticism about whether the sector can sustain its lofty valuations. The selloff accelerated when the S&P 500 fell below its 50‑day moving average, a widely watched technical indicator.
Traders also weighed comments from Federal Reserve Governor Christopher Waller. In a forum, Waller said monetary policy remains above neutral and signaled that rates are high enough to allow for cuts if inflation continues to ease. He cautioned that there is no need to rush, given still‑elevated price pressures.
Investors saw the remarks as dovish, which helped bond yields stabilize; the ten‑year Treasury yield hovered around 4.15%. The dollar index edged up 0.1%, while the euro held at roughly $1.175 and sterling slipped 0.1%. The Japanese yen weakened 0.5% as investors discounted a near‑term policy shift in Japan.
Waller’s comments came ahead of a consumer price index report that is expected to be less reliable because the government shutdown disrupted data collection. Options pricing suggests investors expect the S&P 500 to move about 0.7% in either direction when the data are released, less than the average 1% swing from prior reports.
The Fed has already lowered rates for three consecutive meetings to support a cooling labor market, yet policymakers remain divided over how many additional cuts will be needed next year.
Cryptocurrency markets retreated, with Bitcoin down 1.5% and Ether off 3.4%.
Corporate news added to the day’s narrative. The following highlights capture notable developments:
OpenAI and Amazon: OpenAI is in early discussions to raise at least $10 billion from Amazon and use the retailer’s Trainium chips to expand its AI operations, potentially valuing OpenAI at more than $500 billion.
Oracle Project: Oracle said that negotiations over an equity investment for its Michigan data center project are on schedule and that Blue Owl Capital, previously involved in similar data center financings, is not part of the talks.
Warner Bros. Discovery: The parent of HBO and CNN urged shareholders to reject a hostile bid from Paramount Skydance and stick with its prior agreement with Netflix, calling the rival offer “inferior.”
Ford’s Battery Deal: Ford Motor terminated its 9.6 trillion‑won battery contract with LG Energy Solution after trimming its electric‑vehicle ambitions.
General Mills: The food company exceeded quarterly sales expectations by enhancing packaging and marketing while trimming some prices; its CEO observed that more shoppers are buying items on sale.
SpaceX: The private rocket company told employees it is entering a regulatory quiet period, a step toward a planned initial public offering in 2026
Joby Aviation: The air‑taxi maker intends to double its US manufacturing capacity by 2027, expanding production in California and Ohio.
Spirit Aviation and Frontier: Spirit Aviation Holdings, which is in bankruptcy, is in revived talks to merge with Frontier Group to avert insolvency amid stiff competition from larger carriers.
Tricolor Holdings: Federal prosecutors charged Tricolor founder Daniel Chu with conspiring to defraud lenders and investors of the bankrupt subprime auto company.
BBVA: Spanish bank BBVA is considering large share buybacks after its unsuccessful bid for Banco Sabadell.
The combination of a technology pullback, cautious Fed messaging and a broad mix of corporate news kept investors on edge. While rate‑cut expectations and rotation into smaller companies provided some support, concerns about AI profitability and data reliability continue to shape market sentiment.
Also Read: US Stock Market Today: S&P 500 and Dow Jones Dip 0.5% as NASDAQ Proposes 23-Hour Trading
