Nvidia, AI Stocks Fall as Markets Retreat Slightly/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The U.S. stock market slipped Thursday as Nvidia and other leading AI stocks faltered, pulling down the broader indexes. Investors remain cautious amid renewed concerns over interest rates and looming economic data. Despite recent records, volatility is expected as government reports resume following a prolonged shutdown.
AI Stocks Drag Markets Lower: Quick Looks
- S&P 500 down 0.6%, Nasdaq drops 1.1% in morning trading
- Nvidia loses 2.7%, weighing heavily on tech sector
- AI-linked stocks like Palantir, Super Micro also fall
- Investors question sustainability of AI stock rally
- Comparisons made to 2000 dot-com bubble amid high valuations
- Market braces for key economic data post-shutdown
- Federal Reserve rate cut bets cool ahead of December meeting
- 10-year Treasury yield climbs to 4.10%
- Disney stock falls 8.2% despite earnings beat
- Cisco gains 4.3% on stronger-than-expected results
Nvidia, AI Stocks Fall as Markets Retreat Slightly
Deep Look
NEW YORK — U.S. stocks edged lower Thursday morning as momentum in high-flying artificial intelligence stocks began to waver. Major indexes pulled back from recent record highs, with Nvidia and other AI giants losing steam amid renewed uncertainty over interest rates and a flood of upcoming economic data.
By 10 a.m. Eastern, the S&P 500 was down 0.6%, slipping further from its all-time high reached in late October. The Dow Jones Industrial Average fell 106 points or 0.2%, retreating slightly from its recent record. The Nasdaq composite, more sensitive to tech sector movements, declined 1.1%.
Nvidia and AI Momentum Fades
Nvidia, a key driver of the recent AI boom, lost 2.7% and led declines in the tech-heavy Nasdaq. Other AI-linked companies followed: Palantir Technologies slid 3.4%, and Super Micro Computer dropped 4.2%.
These companies have enjoyed massive rallies in 2025, with Palantir up nearly 174% year-to-date earlier this month. While these gains have helped push the broader market to historic highs, they’ve also fueled concerns of a bubble reminiscent of the 2000 dot-com crash, when inflated tech valuations collapsed, dragging the S&P 500 down by nearly half.
Investors are now grappling with the big question: Can AI leaders continue to deliver earnings growth fast enough to justify their soaring valuations?
Post-Shutdown Market Uncertainty
Adding to the uncertainty is the resumption of key U.S. government economic reports following the end of a record-setting six-week government shutdown. While stocks rose during the shutdown, Wall Street is now preparing for volatility as long-delayed data on jobs, inflation, and economic growth are released.
The concern is that strong economic data could prompt the Federal Reserve to pause or slow its anticipated interest rate cuts, which markets had been pricing in as a key support for further stock gains.
According to Doug Beath, global equity strategist at Wells Fargo Investment Institute, “The looming data deluge may spur additional volatility in the coming weeks.”
Rate Cut Bets Recede
Market expectations for a rate cut at the Fed’s next meeting in December have slipped. Traders now place a 53% chance of a cut, down from nearly 70% just a week ago, per data from CME Group. That shift helped drive Treasury yields higher, with the 10-year yield rising to 4.10% from 4.08% the day before.
Higher yields can make stocks less attractive by increasing borrowing costs and offering better returns on bonds, adding further pressure to equity markets.
Disney, Cisco Headline Corporate Moves
In corporate news, The Walt Disney Company fell 8.2% after reporting quarterly profits that topped forecasts but came up short on revenue. The revenue miss dampened optimism despite CEO Bob Iger’s continued restructuring efforts and focus on streaming profitability.
On the upside, Cisco Systems jumped 4.3% after delivering stronger-than-expected earnings and revenue, signaling resilience in enterprise tech spending despite economic headwinds.
Global Markets Mixed
Internationally, markets showed mixed results. Japan’s Nikkei 225 rose 0.4%, even as SoftBank Group dropped 3.4% after confirming it had fully exited its investment in Nvidia — a decision that appears poorly timed given Nvidia’s recent stock performance.
In Europe, market indexes hovered in a narrow range, showing modest gains and losses as investors awaited more signals from the U.S.
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