NEW YORK >> U.S. stocks extended their selloff today as investors turned the page on a roller-coaster week with economic worries, the longest-ever federal government shutdown, and sky-high tech stock valuations dampening risk appetite.
All three major U.S. equity indexes were lower, with the tech-laden Nasdaq showing the steepest percentage loss.
The selloff punctuates a tumultuous week marked by mounting concerns over inflated valuations of artificial intelligence-related momentum stocks, which have provided much of the upside muscle to the stock market’s rally over recent months. All three indexes were on course to lose ground from last Friday’s close, with the Nasdaq headed for its largest weekly percentage drop since late March.
The information technology sector and broader semiconductor index were set for their biggest weekly declines in seven months.
The Philadelphia SE Semiconductor index was off 2.9%, and was also on a path toward its worst weekly performance since March.
The Russell 2000 hit an over seven-week low. The CBOE Volatility Index, a barometer of investor anxiety, touched its highest level in three weeks.
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“After a record six-month rally, some type of indigestion was always possible and we think that’s what’s happening,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “The big question is whether this just a near-term hiccup or something bigger.”
A congressional impasse has resulted in the longest government shutdown in U.S. history, fueling concerns over its economic effects. Those concerns were on full display in the University of Michigan’s preliminary take on November Consumer Sentiment, which fell to its lowest level in over three years. Survey participants’ assessment of current conditions plunged to its most pessimistic reading in the survey’s history. Overall sentiment has slid 29.9% since November 2024, when U.S. President Donald Trump was elected to his second term in the Oval Office.
The shutdown has also led to a blackout of official economic indicators, complicating the Federal Reserve’s dual mandate of promoting full employment and price stability.
“Flying in the dark in the absence of economic data due to the shutdown is weighing on investors as well, adding a layer of uncertainty,” Detrick added. “We know earnings were strong, but the housing market is weak.”
“Clearly the labor market is weakening and investors are taking a sell first, ask questions later mentality so far in November.”
On the trade front, Beijing has begun creating a new rare earth licensing program that could speed up shipments but is likely to fall short of Washington’s hopes for a complete rollback of restrictions. The Dow Jones Industrial Average fell 173.65 points, or 0.37%, to 46,738.65, the S&P 500 lost 41.97 points, or 0.62%, at 6,678.35 and the Nasdaq Composite dropped 269.47 points, or 1.17%, to 22,784.52.
Third-quarter reporting season continued to barrel toward its conclusion, with 446 of the companies in the S&P 500 having reported. Of those, 83% have delivered better-than-expected earnings, according to LSEG data.
Analysts now predict year-on-year S&P 500 earnings growth of 16.8% for the July-September period, a significant improvement over the 8.0% annual growth.
Microchip Technology shares dropped 8.1% after forecasting quarterly net sales below estimates. Tesla shareholders approved the largest corporate pay package in history for CEO Elon Musk. The electric vehicle maker’s shares fell 2.8%. Shares of Expedia surged 17.9% after the travel platform reported solid bookings from its business-to-business segment.
Block slumped 8.0% after missing third-quarter profit expectations, and Take-Two Interactive fell 8.3% following the company’s decision to delay the launch of its popular video game GTA VI to November 2026.
Declining issues outnumbered advancers by a 1.25-to-1 ratio on the NYSE. There were 71 new highs and 189 new lows on the NYSE.
On the Nasdaq, 1,665 stocks rose and 2,895 fell as declining issues outnumbered advancers by a 1.74-to-1 ratio.
The S&P 500 posted 11 new 52-week highs and 14 new lows while the Nasdaq Composite recorded 28 new highs and 309 new lows.
Additional reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru.