Tech Stocks Get Smacked as Wall Street Loses Nerve Over Missing Data

Reuters, AP, Investor’s Business Daily, and the Wall Street Journal contributed to this report.

Wall Street hit the brakes hard on Thursday as investors bailed out of big-name tech and AI stocks and fretted over a strange new problem: the government may literally never release some key economic data.

By midday, all three major indexes were deep in the red:

• Dow Jones: -1% (about 487 points)
• S&P 500: -1.2%
• Nasdaq: -1.9%

The drop came just one day after the Dow notched a fresh record and after President Donald Trump signed a funding bill ending the record 43-day government shutdown.

Now the government is reopening — but the data isn’t.

Normally, traders obsess over reports like the jobs numbers and Consumer Price Index (CPI) to guess what the Federal Reserve will do with interest rates.

This time? The White House says October CPI and jobs reports may never be released because the shutdown prevented the government from collecting all the data. That’s left:

• The Fed
• Wall Street
• And pretty much every economist in the country

relying on private data and models instead of the usual official playbook.

“There’s a lot of uncertainty about the state of the economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “We’re going through a bit of a correction in the AI sector and we’re seeing a rotation in the market. What’s really weighing on investors now is the state of the economy and the prospects of a rate cut in December.”

Traders have already started dialing back expectations for a Fed cut next month:

• Odds of a December rate cut have dropped to around 50%, down from about 70% just a week ago, according to CME’s FedWatch tool.

That wobble in Fed hopes helped push Treasury yields slightly higher, with the 10-year note edging up to about 4.10% — another headwind for stocks.

The worst of the pain was in tech and communication stocks, which have been on a wild AI-driven tear for months.

The S&P 500’s information technology and communication services sectors were the biggest drags, with some of the market’s biggest winners suddenly looking vulnerable:

• Nvidia: -4%
• Alphabet (Google): -2.5%
• Super Micro Computer: -6.4%
• Palantir Technologies: -5%
• Broadcom: -4.9%
• The “Magnificent Seven” ETF: -2.3%

After massive gains this year — Palantir was up nearly 174% at one point — investors are starting to ask whether the AI craze has gone too far, too fast. Comparisons to the dot-com bubble of 2000 are becoming more frequent, and that’s never a comforting reference.

Still, it wasn’t all doom in tech. Cisco Systems jumped about 4.5% after hiking its full-year revenue and profit forecast, betting on continued demand for its networking gear.

Outside pure tech, Disney was one of the biggest individual drags on the market. Its shares slid roughly 9%, pressuring the Dow, after the company warned that its distribution fight with YouTube TV over carrying its channels — including ESPN — could drag on.

That dispute has already knocked Disney’s channels off YouTube TV, frustrating millions of subscribers and raising the stakes in the streaming-era version of the old cable-carriage wars.

Meanwhile, the market’s big rotation continued underneath the headline numbers:

• The S&P 500 Value Index is up about 1.6% so far this week
• The Growth Index is down about 0.3%

In other words, investors are quietly shifting money away from high-flying growth and AI names into more traditional, “defensive” corners of the market like healthcare and other value plays. The Dow, packed with more old-school names, had actually been benefiting from that shift before Thursday’s selloff.

Even without official October data, the private numbers that are available aren’t exactly soothing:

• Payroll processor ADP data suggests private employers shed more than 11,000 jobs per week through late October.
• Indeed Hiring Lab says retail-related job postings were down 16% in October from a year earlier.

That’s more evidence of a cooling labor market at the same time the Fed is trying to judge how aggressively it should keep cutting interest rates.

Federal Reserve officials haven’t been especially reassuring either — several have recently voiced skepticism about another cut in December. More speeches are on the schedule, and every word is now under a microscope.

Now that the government is back open, Wall Street is bracing for what one strategist called a “data deluge” — a messy backlog of postponed reports on jobs, inflation, and growth that may arrive late, out of order, or not at all in the case of October.

Doug Beath, global equity strategist at Wells Fargo Investment Institute, warned that the flood of delayed numbers could trigger fresh swings in the weeks ahead.

For now, here’s where things stand:

• The shutdown is over, but parts of the economic picture may stay permanently blurry.
• AI and mega-cap tech — the engines that powered this year’s rally — are finally showing some vulnerability.
• Value and defensive stocks are quietly getting more attention as investors rethink how much risk they really want.
• And the Fed is still trying to steer the economy while, in the words of Chair Jerome Powell, “driving in the fog.”

Markets don’t like fog. Thursday’s selloff was the latest reminder.