Stock Market Today: Dow, S&P 500, Nasdaq Slide as Wall Street Weighs Shutdown Fallout and Rate Path

​US stocks took a steep dive on Thursday as investors digested the economic fallout from the record 43-day government shutdown and reassessed expectations for Federal Reserve policy heading into year-end.

The Nasdaq Composite (^IXIC) dropped 1.8% as renewed weakness in megacap tech dragged the broader market lower. The S&P 500 (^GSPC) fell 1.2%, while the Dow Jones Industrial Average (^DJI) lost 0.9%, or more than 400 points, erasing its two-day winning streak that had lifted it to fresh records earlier this week.

Market Movers:

• ​Disney (DIS) -9% — Shares dove after the company reported disappointing earnings that fell short of Wall Street expectations. Dips in its linear TV and streaming divisions offset modest theme park gains, while higher content costs weighed on profit margins. Investors reacted to a muted forecast that offered little clarity on when Disney+ could return to sustained profitability.
• Nvidia (NVDA) -4% — The chipmaker struggled amid ongoing pressure on AI-linked names, extending a two-day slide despite several analyst price-target hikes ahead of its quarterly report next week. Traders cited concerns about stretched valuations and a possible rotation away from high-multiple tech stocks following the market’s recent run-up.
• Tesla (TSLA) -6% — Shares dropped as investors continued to trim exposure to high-growth names following weaker-than-expected global EV delivery data and new reports of additional price cuts in China. The sell-off erased the stock’s early-week gains and reinforced fears that margin compression may persist through early 2026.
• Cisco (CSCO) +4% — The networking equipment giant climbed after posting better-than-expected quarterly results, highlighting strong demand from cloud and hyperscale customers investing in AI infrastructure. Cisco raised its full-year sales and profit outlook, signaling confidence that AI-related growth will continue into next year.
• Arm Holdings (ARM) -5% — Shares declined for a second straight session as chip stocks retreated broadly. Despite optimism about licensing revenue from next-generation AI designs, traders locked in profits following the stock’s recent surge and ahead of new semiconductor export rules expected later this month.

​Shutdown Fallout and Economic Data Delays Cloud Outlook

President Trump signed a bill late Wednesday to end the longest government shutdown in US history, formally reopening agencies after six weeks of stagnancy. While the resolution caused relief, investors quickly shifted focus to the economic cost — and the uncertainty it leaves behind.

The Congressional Budget Office estimated that the shutdown could trim roughly $11 billion from GDP through 2026, citing lost productivity and disrupted government services. But the impact on policymaking may prove even greater. The White House warned that key reports on inflation and employment “will be permanently impaired,” leaving the Fed with limited visibility ahead of its December meeting.

White House economic adviser Kevin Hassett said Thursday that October’s jobs report will exclude the unemployment rate entirely, as the necessary household survey “wasn’t conducted.” Economists worry that the missing data could complicate the Fed’s decision-making at a time when officials remain divided over the timing and scope of rate cuts.

Rate-Cut Bets Waver as Fed Split Deepens

The market’s conviction on rate relief has weakened sharply over the past month. Traders now assign roughly 50-50 odds to a quarter-point cut in December, down from over 90% in mid-October, according to CME FedWatch data.

A series of hawkish comments from Fed policymakers on Wednesday reinforced the divide. While some officials emphasized patience amid still-elevated inflation, others warned that prolonged weakness in the labor market could tip the economy toward a slowdown. Atlanta Fed President Raphael Bostic, who announced his upcoming retirement, said policymakers should “remain cautious” until clearer data emerge — remarks that underscored the growing uncertainty in the absence of reliable government statistics.

Tech and AI Stocks Lose Steam

High-valuation technology names led the sell-off, reversing recent leadership as investors rotated toward value and defensives. The “Magnificent Seven” megacaps were mostly lower, with Nvidia, Apple, and Tesla dragging the Nasdaq.

AI infrastructure names also wobbled. Arm, Broadcom, and CoreWeave each traded lower, even after bullish AI announcements earlier in the week. Traders said the selling reflected a “breather” rather than a breakdown, but noted that stretched positioning in AI-related stocks could keep volatility elevated through next week’s Nvidia earnings.

Looking Ahead

Investors will turn their attention to fresh economic indicators once data collection resumes, though several October releases — including inflation and unemployment — may never be published. The market’s next catalysts include Fed Chair Jerome Powell’s upcoming remarks and earnings from major retailers, which could shed light on consumer resilience heading into the holiday season. For now, Wall Street is grappling with the aftershocks of the shutdown, and with a market that suddenly seems less sure about the strength of the recovery it had been celebrating just days ago.