Tech Led Slide Pushes S&P 500, Nasdaq Lower, Nvidia Retreats From Peak

Stocks slipped Thursday as the S&P 500 and Nasdaq retraced gains made earlier in the week, with a concentrated sell off in technology shares pulling broad market averages lower. The move followed a stretch of record closes and eye catching gains for chipmaker Nvidia, which earlier in the week climbed to a $5 trillion market capitalization before giving back ground.

The correction came amid a flurry of headlines that has reshaped investor calculus over the past week. On October 28 major stock indexes closed at fresh records, and Nvidia surged to new highs. The next day Federal Reserve Chair Jerome Powell flagged caution, saying another rate cut in December is not a foregone conclusion. That remark introduced renewed scrutiny of rate path expectations and appeared to tighten the leash on growth sensitive, high multiple stocks.

The market reaction accelerated on October 30 when technology heavyweights including Meta Platforms and Microsoft moved lower following their earnings reports. The simultaneous earnings weakness and lofty valuations among AI leaders amplified selling pressure. Nvidia, which had been the engine of the rally, gave up a portion of its recent gains as traders adjusted positions and took profits.

Despite the volatility around the midpoint of the week, markets showed signs of resilience. On October 31 stocks rebounded with the Nasdaq receiving a lift from Amazon, and indexes ultimately posted weekly and monthly gains. That pattern underscores a bifurcated market where headline indices can climb on a handful of megacap winners while broader breadth remains fragile.

Macro and policy developments have been an important backdrop. In late October markets also absorbed data and geopolitical concerns, including U.S China trade tensions that weighed on sentiment earlier in the month. Episodes of fiscal uncertainty and a string of corporate earnings seasons have made investors sensitive to guidance as much as to headline profits, heightening swings around quarterly reporting.

From a market structure perspective the episode highlights an enduring trend of concentrated leadership. A small group of technology firms has accounted for a disproportionate share of index returns, which raises the potential for outsized impact when investors rotate out of these names. The swing between record highs and sharp intraday reversals speaks to elevated expectations priced into AI and cloud related growth, and to the vulnerability of that narrative to shifts in rate expectations and near term earnings news.

For portfolio managers and retail investors the immediate implications are practical. Risk tolerance and position sizing become central as volatility near term is likely to persist. For policymakers the episode reinforces the challenge the Federal Reserve faces in communicating a path to lower rates without destabilizing asset prices. Over the longer term markets will watch whether earnings growth can validate current valuations in AI related sectors, or whether a broader rotation into cyclicals and value stocks takes hold as rate clarity improves.

The sequence of record highs, rapid gains, a policy induced pause, and a subsequent rebound captures the market’s current tug of war between enthusiasm for transformative technology and caution about economic policy and corporate fundamentals.