US stock market suffers: Nasdaq, Dow, S&P sink to their worst day in over a month, Disney falls nearly 8%
The declines followed a historic 43-day government shutdown that ended just a day earlier, as markets reacted to uncertainties about the economic impact of the shutdown and changing expectations about the Federal Reserve’s interest rate policies.
The Dow Jones index fell nearly 800 points, or 1.65%, to close at 47,457.22 points after reaching record highs the previous day. While the S&P 500 fell 1.66% to 6,737.49 points, the Nasdaq, which is dominated by stocks related to technology and artificial intelligence, fell 2.29% to 22,870.36 points. The Russell 2000 small-cap index also reflected broader market weakness.
The longest government shutdown in U.S. history has delayed critical economic reports such as employment figures and inflation data, leaving investors without the usual gauges to gauge the economy. Although the shutdown ended with President Donald Trump signing a funding bill late Wednesday, the release of key data could still be delayed or canceled, complicating the Federal Reserve’s outlook on interest rates. Due to this uncertainty, markets reduced their expectations for a rate cut in December.
Technology stocks led declines, with heavyweights such as Nvidia, Tesla and Alphabet falling between 3.5% and 7%. Communication services were also negatively affected; Disney shares are down nearly 8% following mixed quarterly results. Despite the strong rise in the technology sector at the beginning of the week, investors were seen adjusting their valuations due to concerns about high prices and potential regulatory issues.
Market experts see the decline as a healthy consolidation. Laird Norton Wealth Management’s Chief Investment Officer Ron Albahary described this as “natural consolidation,” while BMO Private Wealth’s Chief Market Strategist Carol Schleif warned that volatility could continue as the market adjusts to the return of delayed economic data, as reported by CNBC. Overall, the market reaction reflects tension between optimism about the government reopening and caution regarding uncertain economic signals and Fed policy direction. Investors will closely watch economic releases in the coming weeks for clearer indicators of economic health and the Fed’s actions.FAQ:
Q: How poorly have the major indices performed?
A: The Dow fell nearly 800 points (1.65%), the S&P 500 fell 1.66% and the Nasdaq fell 2.29%: the worst single-day performance in more than a month.
Question: Which sectors were most affected?
A: Technology and communications services sectors, especially AI-related sectors, and tech giants such as Nvidia, Tesla, Alphabet, and Disney have suffered significant losses.
Question: What impact did the government shutdown have on the market?
A: The shutdown delayed the release of key economic data, creating uncertainty that weighed on market confidence and contributed to volatility.
