New York
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\n For months, it felt like nothing could knock stocks off their steady ascent \u2014 but November has been a rough month on Wall Street.\n <\/p>\n
\n The tech-heavy Nasdaq Composite is down almost 3.5% this month and on track for its first losing month since March. The Nasdaq has shed roughly $1.74 trillion in market value in two weeks as investors have dumped tech stocks.\n <\/p>\n
\n Stocks opened sharply lower Friday before bouncing off their lows as investors bought the dip. The major indexes wavered into the closing bell. The Nasdaq turned positive and closed higher by 0.13% after briefly falling almost 1.9%. The S&P 500 fluctuated and closed lower by 0.05%. The Dow fell 310 points, or 0.65%.\n <\/p>\n
\n \u201cStocks were set for another horrific session at the open following yesterday\u2019s debacle but investors saw the sharp dip as an opportunity to accumulate shares,\u201d said Jos\u00e9 Torres, senior economist at Interactive Brokers.\n <\/p>\n
\n The benchmark S&P 500 is still down 1.55% this month while the Dow is down 0.87%. The S&P 500 has shed more than $1.3 trillion in market value in just over two weeks as it has retreated from a record high set in late October.\n <\/p>\n
\n After months of gains, investors have outsized expectations, making them easer to disappoint. Tech stocks have become relatively pricey<\/a>.\n <\/p>\n \n And after the government shutdown halted official data releases for weeks, investors are unsure what the new figures, as government releases resume,<\/a> will show about the state of the world\u2019s biggest economy. That, in turn, is stoking uncertainty about whether the Federal Reserve will continue to cut interest rates in December, and adding to the Wall Street jitters.\n <\/p>\n \n \u201cWhen the government was shut down, we could believe whatever we wanted to believe,\u201d Ed Yardeni, president of Yardeni Research, told CNN\u2019s Matt Egan. \u201cNow we need to be data dependent, and that may not be as much fun.\u201d\n <\/p>\n \n Enthusiasm about artificial intelligence carried the market to new record highs this year. But now some investors are hitting pause, taking profits and reassessing whether those stocks will continue to produce superior returns.\n <\/p>\n \n \u201cWith lofty valuations in AI-related stocks, it\u2019s understandable that investors are on edge about anything that might go wrong,\u201d Yardeni wrote in a Thursday note.\n <\/p>\n \n Bitcoin, which can serve as a gauge of how risk-on investors are feeling, slid 4% on Friday and hovered around $94,500. The cryptocurrency has tumbled 25% since it hit a record high in early October.\n <\/p>\n \n Wall Street and the Fed are awaiting a deluge of economic data that was delayed due to the shutdown.\n <\/p>\n \n That is contributing to mounting nerves about the Fed\u2019s next move. Traders on Friday were pricing a 46% chance the central bank will cut rates in December, down from a 96% chance one month ago.\n <\/p>\n \n At the last policy meeting, in October, Fed Chair Jerome Powell cast some doubt on whether the Fed would cut rates again this year. Fed officials \u2014 including Boston Fed President Susan Collins, who is a voter on policy moves this year \u2014 delivered remarks this week that have shown hesitancy to continue cutting rates.\n <\/p>\n \n While Evercore ISI analysts in a note said they still see an interest rate cut next month, they think it\u2019s \u201cvery hard to call\u201d because of a combination of factors, including \u201cdata blindness.\u201d\n <\/p>\n \n The central bank\u2019s rate cuts in September and October boosted stocks, and a pause on rate cuts could pose troubles for stocks that have rallied on expectations for lower borrowing costs \u2014 in particular, the AI and tech stocks that have propelled the market higher.\n <\/p>\n \n \u201cExtreme fear\u201d was the sentiment driving markets on Friday, according to CNN\u2019s Fear and Greed index<\/a>.\n <\/p>\n \n But some investors say a pullback in stocks can also be healthy.\n <\/p>\n \n The Nasdaq gained every month from April through the end of October. Now, the market is resetting as investors reassess the outlook.\n <\/p>\n \n \u201cThis (pullback) is somewhat overdue, and I don\u2019t think it\u2019s the start of a correction<\/a>,\u201d Yardeni said.\n <\/p>\n \n There is also increasing skepticism about whether Big Tech companies can make enough money to justify the enormous spending taking place on AI deals now.\n <\/p>\n \n \u201cThe technology sector has faced selling pressure in recent weeks amid concerns over rising debt issuance and a surge in capital expenditures\u201d like new data centers, Keith Lerner, chief market strategist at Truist, told CNN\u2019s Matt Egan in an email. \u201cInvestors are questioning whether these investments will translate into future profitability.\u201d\n <\/p>\n \n Oracle shares (ORCL<\/a>) surged 36% in one day on September 10 after the company announced a $300 billion deal with OpenAI. Shares in Oracle have tumbled since then, erasing those gains.\n <\/p>\n \n \u201cCompanies announcing large supply deals with OpenAI have similarly been met with skepticism around OpenAI\u2019s ability to deliver on its financial objectives,\u201d John Belton, portfolio manager at Gabelli Funds, said in an email.\n <\/p>\n \n It\u2019s not just Oracle facing pressure. Meta shares (META<\/a>) are down 23% since hitting a record high in mid-August. Nvidia shares (NVDA<\/a>) are down 10% since hitting a record high in late October. Palantir shares (PLTR<\/a>) are down 16% since hitting a record high on November 3.\n <\/p>\n \n \u201cWhat\u2019s happened recently in the market isn\u2019t even close to a tech wreck, but it may be a bit of a tech reckoning,\u201d said Daniel Skelly, head of Morgan Stanley\u2019s Wealth Management Market Research & Strategy Team.\n <\/p>\n \n To Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions, this month has been defined by investors rotating out of tech stocks and into other sectors.\n <\/p>\n \n The recent pullback, he said, feels like \u201cinvestors trying to protect profits after a really healthy run off the lows in April.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"New York \u00a0\u2014\u00a0 For months, it felt like nothing could knock stocks off their steady ascent \u2014 but…\n","protected":false},"author":2,"featured_media":140998,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-140997","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/140997","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=140997"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/140997\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/140998"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=140997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=140997"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=140997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}