By STAN CHOE, AP Business Writer<\/p>\n
NEW YORK (AP) \u2014 The U.S. stock market is sinking Monday as\u00a0Nvidia\u00a0and other superstars created by the frenzy around\u00a0artificial-intelligence\u00a0technology dim some more.<\/p>\n
The S&P 500 fell 1.2% and pulled further from\u00a0its all-time high<\/a>\u00a0set late last month. It\u2019s on track for\u00a0one of its worse days<\/a>\u00a0since a sell-off in April, a little behind this past Thursday\u2019s loss.<\/p>\n The Dow Jones Industrial Average was down 620 points, or 1.3%, with roughly half an hour remaining in trading, and the Nasdaq composite was 1.2% lower.<\/p>\n Nvidia was again the heaviest weight on the market, as it\u2019s often been in its last\u00a0couple<\/a>\u00a0of\u00a0tumultuous weeks.<\/a>\u00a0The chip company fell 2.8%, while losses for other AI winners included a 2.4% fall for Palantir Technologies and 6.7% slide for Super Micro Computer.<\/p>\n Other areas of the market that had been high-momentum winners also sank. Bitcoin fell below $92,000, down from nearly $125,000 last month, for example. That helped drag down Coinbase Global by 8.2% and Robinhood Markets by 7.1%.<\/p>\n Critics\u00a0have been warning<\/a>\u00a0that the U.S. stock\u00a0market could be primed for a drop<\/a>\u00a0because of how high prices have shot since April, leaving them looking too expensive. Critics point in\u00a0particular to stocks swept up in the AI mania<\/a>, which have been surging at spectacular speeds for years.<\/p>\n Even with Monday\u2019s loss, Nvidia is still up nearly 38% for the year so far after it doubled in price in four of the last five years. Over the last two weeks, the worries about a potentially too-high price have sent it swinging by at least 1.8% in eight of the last 10 days.<\/p>\n That has Wall Street\u2019s spotlight on Wednesday, when Nvidia will report how much profit it made during the summer. AI stocks have surged as much as they have because of expectations that they\u2019ll produce huge growth in profits. If they fail to top analysts\u2019 expectations, that would undercut one of the big assumptions that\u2019s driven the U.S. stock market to records.<\/p>\n Such high expectations extend beyond tech stocks, even if they are toughest for AI darlings.<\/p>\n Aramark fell 4.4% after the company reported a profit for the latest quarter that fell short of analysts\u2019 expectations. The company, which offers food and facilities management for schools, national parks and convention centers, also said it expects an underlying measure of profit to grow between 20% and 25% this upcoming year. While relatively strong, that was less than what analysts had been forecasting.<\/p>\n That helped offset a rise of 2.9% for Alphabet. It jumped after Berkshire Hathaway said it built a $4.34 billion ownership stake in Google\u2019s parent company. Berkshire Hathaway, run by\u00a0famed investor Warren Buffett<\/a>, is notorious for trying to buy stocks only when they look like good values while avoiding anything that looks too expensive.<\/p>\n Another source of potential disappointment for Wall Street is what\u00a0the Federal Reserve<\/a>\u00a0does with interest rates. The expectation had been that the Fed would keep cutting interest rates in hopes of shoring up\u00a0the slowing job market<\/a>. Wall Street loves lower rates because they can give a boost to the economy and to prices for investments.<\/p>\n But questions are rising about whether a third cut for the year will come out of the Fed\u2019s next meeting in December, something that traders had earlier seen as very likely. The downside of lower interest rates is that they can make inflation worse, and\u00a0inflation has stubbornly remained<\/a>\u00a0above the Fed\u2019s 2% target.<\/p>\n Fed officials<\/a>\u00a0have also pointed to\u00a0the U.S. government\u2019s shutdown<\/a>, which delayed the release of\u00a0updates on the job market and other signals<\/a>\u00a0about the economy. With less information and less certainty about how things are going, some Fed officials have suggested it may be better just to wait in December to get more clarity.<\/p>\n Now that the shutdown is over, the government is preparing to release September\u2019s delayed jobs report on Thursday. That could create further swings for the market. Data that\u2019s very strong would likely stay the Fed\u2019s hand on rate cuts, while figures that are very weak would raise worries about the economy.<\/p>\n In 2026, the Fed is likely to cut interest rates only in response to a slowing economy instead of trying to cut ahead of it, according to Barry Bannister, chief equity strategist at Stifel. That\u2019s not as good an environment for stock prices, and Bannister said the \u201cFed\u2019s \u2018free lunch\u2019 is over.\u201d<\/p>\n In the bond market, the yield on the 10-year Treasury edged down to 4.13% from 4.14% late Friday.<\/p>\n In stock markets abroad, indexes fell modestly across much of Europe and Asia.<\/p>\n