By Twesha Dikshit and Purvi Agarwal, Reuters
Wall Street's main indexes were set for weekly declines. Photo: AFP / Getty Images / Michael M Santiago
Wall Street's main indexes extended losses to a second session, and were set for weekly declines, as concerns about the economy and sky-high valuations in the technology sector soured sentiment.
The tech-heavy Nasdaq declined almost 2 percent on Thursday (US Time) after Wall Street executives earlier this week warned a market correction could be on the way.
The Dow is set for its steepest weekly loss in four, while the S&P 500 and the Nasdaq are poised for their worst weekly performances since March.
Optimism around artificial intelligence has pushed markets to all-time highs this year, but concerns over monetisation of the technology and circular spending within the industry has dampened enthusiasm for US stocks in recent days.
"As markets price in more and more excitement around the AI narrative and it gets increasingly difficult to have conviction that it's going to be... worth all of this investment, you're going to get a little more volatility," LPL Financial's chief equity strategist Jeff Buchbinder said.
Tech stocks such as Nvidia and Broadcom fell 4.3 percent and 5 percent, respectively. The information technology sector and the broader semiconductor index were set for their biggest weekly declines in seven months.
Microchip Technology shares dropped 10.1 percent after forecasting quarterly net sales below estimates.
At 11:45am ET, the Dow Jones Industrial Average fell 281.15 points, or 0.6 percent, the S&P 500 lost 69.50 points, or 1.03 percent, and the Nasdaq Composite lost 410.65 points, or 1.78 percent.
The Russell 2000 hit an over seven-week low.
The CBOE Volatility Index, Wall Street's fear gauge, hit its highest level in three weeks.
Tesla shareholders approved the largest corporate pay package in history for CEO Elon Musk. Shares fell 4.7 percent tracking broader market sentiment and weighed on the consumer discretionary sector.
On the earnings front, data compiled by LSEG until Friday showed 82.5 percent of the 446 companies in the S&P 500 that have reported results so far have beaten Wall Street expectations, the highest rate of better-than-expected results since the second quarter of 2021.
Expedia jumped 16 percent to top the S&P 500 after the online travel platform boosted its forecast for full-year revenue growth and posted third-quarter profit above expectations.
Economic concerns linger
The longest US government shutdown in history has led to an information gap, with Federal Reserve policymakers divided on the future of monetary policy as private data paints a mixed picture of the economy.
The preliminary reading of the University of Michigan's Consumer Sentiment Index was 50.3 this month, the lowest since June 2022.
Survey participants' assessment of current conditions was largely responsible for the drop, plunging 10.8 percent to the lowest reading in the survey's history.
"The markets are more worried about the jobs situation right now, given we've had additional layoff announcements," Buchbinder said.
"We're flying a little bit blind... so we need to combine a lack of information with increasing fears."
Among others, Block slumped 10.6 percent after missing third-quarter profit expectations, and Take-Two Interactive declined 8.5 percent after delaying its popular video game GTA VI to November 2026.
Declining issues outnumbered advancers by a 1.5-to-1 ratio on the NYSE and by a 2.39-to-1 ratio on the Nasdaq.
The S&P 500 posted 11 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 22 new highs and 282 new lows.
- Reuters
