In early morning trading on November 14 (Beijing time), U.S. stocks extended losses during Thursday's late session. A significant sector rotation weighed on major indices, with tech stocks continuing to drag down the market. Despite the U.S. government reopening after a record-long shutdown, investor pessimism over interest rate prospects intensified.
The Dow Jones Industrial Average dropped 717.84 points, or 1.49%, to 47,536.98. The Nasdaq Composite tumbled 561.14 points, or 2.40%, to 22,845.31, briefly falling below its 50-day moving average of 22,810.13 during the session. The S&P 500 declined 112.60 points, or 1.64%, to 6,738.32.
Communication services and information technology sectors led the downturn, pressured by Disney's 7% plunge following mixed fiscal Q4 results. However, healthcare, consumer staples, and energy sectors showed resilience.
Investors continued offloading tech stocks—particularly AI-related names—amid valuation concerns. Despite a strong start to the week, the tech-heavy Nasdaq was on track for a third consecutive daily loss, dragged by heavyweights like NVDA 3xLongSG261006, Broadcom, and ALPHAB 3xLongSG261006.
"This looks like a natural consolidation to me," said Ron Albahary, CIO of Laird Norton Wealth Management, describing the pullback as a "healthy phenomenon." He added, "Part of the AI narrative hinges on capital expenditures materializing. If healthcare, manufacturing, and industrial sectors begin benefiting tangibly from AI, it would validate the core thesis that AI-driven spending boosts productivity."
Equities also faced pressure from shifting Federal Reserve policy expectations. CME's FedWatch Tool now prices just a 49% chance of a December rate cut—down sharply from 62.9% the prior day—as data-dependent policymakers grapple with uncertainty.
During the prolonged government shutdown, the Fed operated without critical October reports like nonfarm payrolls and inflation data. White House Press Secretary Karoline Leavitt warned Wednesday that some reports might never be released, estimating the shutdown could shave up to 2 percentage points off Q4 GDP growth.
The six-week shutdown ended late Wednesday as President Donald Trump signed a funding bill passed earlier by Congress, keeping agencies operational through January.
BMO Private Wealth Chief Market Strategist Carol Schleif noted, "While we never expected lost data to be fully recovered, questions remain about how inflation and employment figures will look post-shutdown. Market volatility wouldn't surprise us as agencies restart and economic releases resume."
While sector rotation offered some relief to diversification-seeking investors, it may also signal growing risk aversion as capital shifts toward defensive assets.
Comments