US stock market crash: Wall Street major indices logged their weakest session in a month, as investors booked profits following the end of the longest government shutdown in history.
All three major U.S. stock indices recorded their sharpest single-day percentage drop in over a month.
The S&P 500 slid 1.66% to close at 6,737.49, the Nasdaq dropped 2.29% to 22,870.36, and the Dow Jones Industrial Average fell 1.65% to finish at 47,457.22.
US stock market crash: Top laggards and gainers
Shares of several top-performing U.S. stocks slipped, as investors grew cautious about lofty valuations driven by enthusiasm around artificial intelligence (AI).
Nvidia-the world’s most valuable company-fell 3.6%, Tesla stock declined 6.6%, and Broadcom stock dropped 4.3%.
Nine of the 11 S&P 500 sector indexes fell, with consumer discretionary leading the declines at 2.73%.
Walt Disney stock slid 7.8% after indicating it may face a prolonged dispute with YouTube TV over the distribution of its cable channels. In contrast, Cisco Systems stock jumped 4.6% after lifting its full-year profit and revenue outlook, supported by strong demand for its networking products.
Why did the US stock market crash?
Wall Street closed sharply lower on Thursday as investors dialled back expectations of interest rate cuts amid rising inflation concerns and mixed views among Federal Reserve officials about the strength of the U.S. economy.
In recent days, more Fed policymakers have expressed caution about proceeding with additional rate cuts, bringing market-implied odds of a December reduction down to nearly 50%. Officials pointed to lingering inflation pressures and a relatively steady labour market, even after two rate cuts earlier this year.
CME FedWatch data shows that the likelihood of a 25-basis-point rate cut by the Fed in December has fallen to 51%, down from 61% earlier in the week.
Meanwhile, the U.S. government shutdown ended after 43 days, which had unsettled investors and interrupted the regular release of economic data.
On the other hand, the US Dollar Index has slipped back toward 99, yet gold prices remain strong at around $4,200 per ounce, even as expectations of a Federal Reserve rate cut continue to diminish.