Stocks Drop as Tech Sell-Off Intensifies

Tech shares led a slide in US stocks as rising concerns about highly valued companies collided with growing doubts about whether the Federal Reserve will cut interest rates next month.

The tech-heavy Nasdaq Composite closed 2.3 per cent lower and the S&P 500 lost 1.7 per cent. Asian markets followed the US lower in early trading, with Japan’s Nikkei 225 index sliding 1.7 per cent and South Korea’s Kospi falling 2.2 per cent.

Concerns that market valuations had become unhinged from fundamentals helped prompt investor Michael Burry, known for his bet against the US housing market ahead of the 2008 financial crisis, to announce he would close his hedge fund Scion Asset Management.

Thursday’s slide in equities was also accompanied by a drop in the US government bond market, sparked by falling odds that the Fed will cut interest rates in December, after two quarter-point reductions in recent months. The US two-year Treasury yield, which is sensitive to rate expectations, rose 0.03 percentage points to 3.59 per cent. Bond yields move inversely to prices.

Tech shares that have pushed the US stock market to record highs in recent months bore the brunt of the selling pressure, with Nvidia, Broadcom and Intel all down more than 3 per cent.

Retail brokerage Robinhood lost 8.7 per cent, Elon Musk’s electric-car company Tesla fell 6.6 per cent and defence contractor Palantir shed 6.5 per cent.

AI data centre operator CoreWeave, which earlier this week unveiled an annual revenue forecast that missed Wall Street estimates, fell more than 8 per cent, taking its decline over the past month to almost 45 per cent.