Wall Street experienced a sharp downturn on Friday as technology stocks faced renewed selling pressure, while hawkish comments from Federal Reserve officials sparked concerns about potential interest rate cuts in the coming month.
Major Indices Witness Steep Declines
The selloff was broad-based across key American indices. At 9:36 a.m. ET, the Dow Jones Industrial Average fell sharply by 568.05 points, or 1.24%, settling at 46,889.17. The S&P 500 followed suit, losing 73.29 points, or 1.09%, to reach 6,664.20. The technology-heavy Nasdaq Composite bore the brunt of the selling pressure, declining by 317.39 points, or 1.44%, to close at 22,552.96.
Economic Data Vacuum Adds to Uncertainty
The market turmoil was exacerbated by the historic, record-long US government shutdown that recently concluded. This created a critical data vacuum that left both Federal Reserve officials and traders grappling with uncertainty. The delay and potential non-release of key economic indicators, including the crucial October jobs report and inflation data, made investors increasingly risk-averse.
This lack of clear, up-to-date economic information has further justified the Federal Reserve's cautious stance on policy easing. Market participants are now concerned about the central bank's ability to make informed decisions without access to timely economic data.
Notable Stock Movements
Several individual stocks witnessed significant movements during the trading session:
- Walmart shares declined by 2.2% after the retail giant announced that CEO Doug McMillon would retire next year.
- Applied Materials experienced a substantial drop of 6.3% after the company indicated expectations of weaker China spending next year due to tighter US export control restrictions.
- Warner Bros Discovery bucked the trend, rising 2.4% after the entertainment company revealed it had amended CEO David Zaslav's employment agreement as part of a strategic business review.
- Cidara Therapeutics emerged as the standout performer, with shares more than doubling – soaring an impressive 105.38% – after pharmaceutical giant Merck announced it would acquire the company in a landmark deal valued at nearly $9.2 billion.
The combination of Federal Reserve uncertainty, missing economic data, and sector-specific concerns created a perfect storm that drove investors toward safer assets, resulting in one of the significant market corrections in recent weeks.
