Nvidia drags Wall Street toward its worst day in a month as AI superstars keep weakening

Market Overview - The U.S. stock market is experiencing significant declines, with the S&P 500 down 1.5% and the Nasdaq composite down 2.4% as of 1:29 p.m. Eastern time [2][3] - The Dow Jones Industrial Average lost 565 points, or 1.2%, from its previous record [2] AI Stocks Performance - Nvidia was a major contributor to the market decline, losing 4.7%, while other AI stocks like Super Micro Computer, Palantir Technologies, and Broadcom also saw significant drops of 7.6%, 6.6%, and 4.7% respectively [3] - Palantir had previously shown a remarkable increase of nearly 174% year-to-date, raising concerns about the sustainability of such gains [3][4] Interest Rate Expectations - There is growing skepticism regarding the Federal Reserve's potential interest rate cuts, with current expectations showing only a 47.6% chance of a cut in December, down from nearly 70% a week prior [6] - Recent comments from Fed officials, including Susan Collins, suggest a likelihood of maintaining steady interest rates for an extended period [7] Economic Indicators and Volatility - The U.S. government shutdown has delayed important economic updates, leading to potential market volatility as these updates are released [8] - The anticipation of new data may influence the Federal Reserve's decisions on interest rates, which could impact stock prices [8] Company-Specific News - The Walt Disney Co. saw a 7.8% decline despite reporting profits that exceeded analysts' expectations, as its revenue fell short [9] - In contrast, Cisco Systems experienced a 4.9% increase after reporting better-than-expected profit and revenue [9] Bond Market Impact - Treasury yields rose, with the yield on the 10-year Treasury increasing to 4.10% from 4.08%, contributing to downward pressure on stock prices [10]