Tech Stocks Plummet as Wall Street Takes a Hit

Another rout hit Wall Street , with formerly high-flying technology stocks again taking the brunt, after a highly anticipated update on the US job market came in weak enough to add to worries about the economy.

The S&P 500 dropped 1.7% to close out its worst week since March 2023. Broadcom, Nvidia and other tech companies led the market lower as worries continue that their prices soared too high in the boom around artificial intelligence, and they dragged the Nasdaq composite down by a market-leading 2.6%.

The Dow Jones Industrial Average dropped 410 points, or 1%, after erasing a morning gain of 250 points.

Sharp swings also hit the bond market, where Treasury yields tumbled, recovered and then fell again after the jobs report showed US employers hired fewer workers in August than economists expected.

That data raised questions about how much the Federal Reserve will cut its main interest rate by at its meeting later this month. The Fed is about to turn its focus more toward protecting the job market and preventing a recession after keeping the federal funds rate at a two-decade high for more than a year.

The two-year Treasury yield initially fell as low as 3.64% after the release of the jobs report, before quickly climbing back above 3.76%. It then dropped back to 3.66% following Waller’s comments, down from 3.74%.

Despite its dismal week, the S&P 500 remains just 4.6% below its all-time high set in July. It’s also still up 13.4% for 2024 so far, which counts as a good year.

A big reason for This sharp drop was weakness for some big tech stocks that had been benefiting from the AI boom.

Broadcom tumbled 10.4% despite reporting profit and revenue for the latest quarter that were above analysts’ forecasts, thanks in part to AI.