Why Nasdaq 100 sinks nearly 2% as the US government reopens: why US stock market is down today - Nasdaq and Small Cap 2000 see the largest drops

Market Overview - The stock market experienced significant declines, with the Nasdaq 100 dropping nearly 2% and the Small Cap 2000 seeing the largest percentage losses [1][10] - Major indices showed notable declines, with the Nasdaq Composite falling 1.75% to 22,997.79, the S&P 500 down 1.09% to 6,776.03, and the Dow Jones slipping 0.79% to 47,873.64 [17] Sector Performance - High-valuation tech stocks faced heavy selling, with Nvidia down about 4%, Tesla sinking more than 6%, and Alphabet and Broadcom both falling around 5% [2][11] - Disney plunged 9% after reporting weak revenue, contrasting with Cisco's gain of over 4% due to strong AI-related demand and positive guidance [14][19] - Small-cap stocks fell sharply as recession fears resurfaced, indicating a rotation into lower-valuation sectors such as healthcare and industrials [7][16] Economic Context - The reopening of the US government after a 43-day shutdown introduced uncertainty, as key inflation and jobs reports remain missing, complicating market expectations for the Federal Reserve's December meeting [3][12] - Rate-cut expectations shifted dramatically, with the odds of a December cut dropping from 95% a month ago to nearly 50-50, influenced by rising Treasury yields [5][13] - Analysts warned that the shutdown could reduce GDP by approximately $11 billion by 2026, adding to the economic uncertainty [5][12] Trading Trends - Investors are expected to face choppy trading conditions as missing economic data and shifting rate expectations create volatility [7][16] - The Nasdaq 100 remains the weakest index, continuing to pull major indices lower amid a broader market sell-off [8][19]