Wall Street’s sharp sell-off rippled through global markets on Thursday as investors digested the end of the record 43-day US government shutdown and fretted over its long-term economic fallout.
The Nasdaq Composite led declines, dropping 2.5%, while the S&P 500 fell 1.8%. The Dow Jones Industrial Average tumbled more than 800 points, or 1.7%, retreating from back-to-back record closes. Heavy losses in tech drove much of the drop, with Nvidia down 4%, Tesla sliding 7%, and Disney plunging 8% after disappointing earnings.
Much of the weakness reflected a market rotation as investors began pulling back from overheated AI-related names. Valuation worries that have built up over months finally came to a head, prompting traders to take profits. Many on Wall Street see the pullback as both healthy and long overdue, given how concentrated gains had become in a handful of mega-cap tech stocks.
The rout didn’t stop at US borders. London’s FTSE 100 finished 1.4% lower, while Germany’s DAX also fell by the same margin. Bitcoin shed more than 3%, settling near $98,478 after dipping below $100,000 earlier in the session. Gold, which initially dropped almost $100 to $4,144, managed to claw back some losses to end the day at $4,176.
In Washington, President Trump signed a bill ending the record-breaking shutdown after a narrow House vote on Wednesday evening. But the damage may already be done, the Congressional Budget Office warned that the closure could shave around $11 billion off US GDP by 2026.
The White House added to the confusion, saying key economic data delayed by the closure “will be permanently impaired,” leaving the Federal Reserve with limited visibility ahead of its December policy meeting. With rate-cut odds now hovering around 50%, investors are finding few safe havens as volatility spreads from equities to crypto and commodities alike.