Investors Dump Tech Shares as Shutdown Relief Evaporates

Key Takeaways

U.S. stocks suffered their worst day in a month as relief from the shutdown resolution quickly evaporated.
Investors are bracing for a surge of delayed economic data that could abruptly shift expectations for December rate cuts.
Tech stocks led the decline, with heavy selloffs in Nvidia, Oracle, Tesla, and CoreWeave.
Rate-cut odds fell to ~50%, pressuring valuations across sectors sensitive to borrowing costs.
Market rotation continues as investors move from high-growth tech to cheaper, defensive sectors.

Market Relief Turns to Market Stress
A broad selloff hit U.S. markets Thursday as optimism surrounding the end of the 43-day government shutdown quickly reversed. With President Trump signing legislation to reopen the government, investors now face a rush of delayed economic data that has been frozen for more than a month. The fear: a flood of new information that could derail expectations for a December interest-rate cut.
The result was the sharpest market drop in a month, with every major index falling and technology stocks leading the decline.
Broad Declines Across Indices
The S&P 500 fell 1.7%, the Dow dropped 798 points, and the Nasdaq declined 2.3%, marking their worst losses since October 10. Small-cap stocks fared even worse, with the Russell 2000 sliding 2.8%.
Bitcoin also extended its retreat, falling back below $100,000 for the first time at 4 p.m. since May.
Rate-Cut Bets Repriced Lower
Investors quickly adjusted interest-rate expectations:
Odds of a December Fed rate cut dropped from 70% last week to ~50% on Thursday, per CME futures
The 10-year Treasury yield rose to 4.111%, reflecting diminished hopes for near-term easing
The shift added pressure to stocks—especially expensive growth names—already trading at elevated valuations after a strong year-to-date rally.
Tech Stocks Lead the Decline
Technology was hit hardest as investors rotated out of high-growth, high-multiple names:
CoreWeave fell 8.3%, deepening its weekly loss to 25%
Nvidia dropped 3.6%
Oracle slid 4.1%
Tesla tumbled 6.6%
Earlier in the week, the surge in healthcare stocks helped offset tech weakness. But Thursday’s selling pressure was too broad to sustain the Dow’s recent momentum, including Wednesday’s record close above 48,000.
Valuation Concerns Rise
Investors remain broadly bullish on AI-driven tech long-term, but many are uneasy about extreme valuations. Portfolio managers are increasingly shifting into value and defensive sectors, taking profits in high-flying growth names.
“You’re seeing rotation into safer, cheaper stocks,” said Mark Malek, CIO at Siebert Financial.
Shutdown Aftermath: Data Shock Incoming
The return of federal data releases adds a new layer of uncertainty. After weeks without reports on jobs, inflation, retail sales, and housing, markets expect a rapid sequence of releases that could create volatility.
The White House signaled some October reports may be incomplete or missing, meaning clarity on economic conditions may take longer to arrive.
A few stocks defied the selloff:
Cisco jumped 4.6% after raising guidance
Verizon gained 0.8% on news the company plans to cut 15,000 jobs
Energy was the only S&P sector to close higher
But overall, Thursday marked a decisive risk-off session as investors recalibrated expectations in real time.

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