Wall Street slumps on tech-stock slide, doubts about December rate cut from Fed

Wall Street faced a lousy end of the week as sagging tech stocks and doubts about another rate cut from the Federal Reserve weighed on investors.

Stock futures were down ahead of Friday’s opening bell, one day after the market’s worst one-day performance in over a month. The Dow Jones Industrial Average shed 800 points on Thursday, and other indexes fell significantly.

There are mounting concerns that major companies in the artificial intelligence space, which had propped up Wall Street numbers, are overvalued and amount to a kind of bubble that needs correction. 

Major stocks, including Nvidia and Advanced Micro Devices, were down in pre-market trading.

Also, the Fed appears less likely to cut interest rates when it meets on Dec. 9-10. 

Central bankers cut rates at their last two meetings. Yet a growing number of members have cited persistent concerns about inflation, dampening prospects for a third cut.

CME Fedwatch set the probability of another rate cut at just 53.4%.

President Trump has pushed the Fed to cut rates aggressively.

Kevin Hassett, the director of the White House National Economic Council, said the most recent inflation numbers came in “much lower than expected,” so it is unclear why the Fed is so reluctant to act.

“The fact that the Fed would move from a posture of three rate cuts to two, after getting news that really says the opposite, makes you really wonder what they’re thinking over there,” he told White House reporters on Thursday.

The U.S. economy is regrouping after the longest government shutdown in history.

Key economic data could not be collected and posted during the shutdown, leaving investors and the Fed without critical information.