US stocks resumed to the downside on Monday, pressured by concerns over Big Tech valuations and uncertainty around Federal Reserve rate cuts.
The Nasdaq Composite erased modest early gains, falling more than 0.8% as investors rotated out of high-flying AI names. The S&P 500 lost 0.9%, while the Dow Jones Industrial Average dropped over 550 points, or 1.2%, as defensive sectors drew money away from riskier tech plays.
Focus is now on Nvidia (NVDA), set to report earnings on Wednesday. Wall Street is watching closely after Peter Thiel’s Thiel Macro hedge fund sold its stake, adding pressure to an already nervous AI trade. Shares declined nearly 2% on Monday.
Berkshire Hathaway offered a counterpoint, taking a nearly $5 billion position in Alphabet. The move lifted the Google parent’s stock about 3%, providing a rare boost to tech amid broader caution.
Investors are also anticipating the delayed September jobs report on Thursday. With the six-week government shutdown having disrupted official economic releases, traders are keen for insights into labor market strength and the Fed’s likely path on interest rates. Current markets price in a 45% chance of a December rate cut, down from 62% a week ago.
Retail earnings will further test the market’s pulse. Walmart, Home Depot, Target, Lowe’s, and Gap are scheduled this week, offering the first official read on consumer demand since the shutdown.
Monday highlighted a market in tension, AI-driven tech still under pressure, but selective bets and data expectations suggest the decline could be more of a recalibration than a full-on sell-off.
