U.S. equities fell on Thursday as major technology shares lost ground and investors turned cautious ahead of upcoming economic data that could shape expectations for the Federal Reserve’s next move.
All three major indexes declined, with the S&P 500 and Nasdaq each down over one percent. Heavy selling in semiconductor and software stocks weighed on sentiment, led by a nearly five percent drop in Qualcomm after the chipmaker warned of reduced business from a major client next year.
Other large-cap tech names also came under pressure. Microsoft and Nvidia both lost more than one and a half percent, while the broader semiconductor index fell more than two percent. The declines followed earlier warnings from Wall Street strategists suggesting that valuations across the AI and tech sector had become stretched.
The mood on Wall Street was further dampened by disappointing corporate updates. DoorDash tumbled over sixteen percent after missing quarterly revenue expectations, and luxury retailer Tapestry slid more than ten percent following a weaker holiday forecast. The losses dragged down the consumer discretionary sector.
Tesla also declined ahead of a shareholder vote on executive compensation, while investors digested mixed job market signals. A report showed layoffs by U.S. employers surged in October to their highest level for that month in over twenty years. Data from private research firms indicated that the labor market cooled further, contrasting with earlier strong private payroll figures.
The uneven data added uncertainty over the economy’s strength, with many analysts now expecting the Fed to adopt a more cautious stance at its December meeting. Chicago Fed President Austan Goolsbee said he would prefer to see additional labor and inflation data before considering any rate changes.
At midday, the Dow Jones Industrial Average was down more than 490 points, while the Nasdaq Composite fell over 420 points. The pullback followed weeks of gains that had pushed the major indexes close to multi-month highs, prompting some investors to lock in profits.
Strategists described the move as a normal correction after a strong rally through early autumn. Persistent worries about trade tariffs, political gridlock, and the ongoing government shutdown have also kept investors on edge, limiting appetite for riskier assets.
Still, a few bright spots emerged. Cloud software firm Datadog rose more than twenty percent after raising its annual profit and revenue forecast, offering some reassurance about demand in enterprise technology.
Market watchers say the next round of labor and inflation data will be crucial in determining whether recent weakness deepens or stabilizes. For now, investors appear content to wait for clearer signals from the economy before making major portfolio shifts.
