Tech Giants Tumble as Market Faces Steepest Decline Since September Amid Fed Uncertainty

On November 15, U.S. stocks concluded with notable declines across all three major indices. The Dow Jones Industrial Average fell by 305.87 points, a decrease of 0.70%, closing at 43,444.99. The Nasdaq Composite and the S&P 500 did not fare any better, closing with decreases of 2.24% and 1.32% respectively. This marked the most significant weekly drop in both the Nasdaq and S&P 500 since September.

The retreat in equities was accompanied by a spike in the Volatility Index (VIX), which saw an intraday surge exceeding 20%. The tech-heavy Nasdaq 100 Index led the retreat, with major tech stocks collectively eroding over half of the gains accumulated since the last presidential election. Notably, leading tech giants such as Amazon, NVIDIA, and Meta saw declines exceeding 3%, sparing only Tesla, which managed to advance.

Economic indicators contributed to the market dynamics. October's retail sales in the U.S. rose by 0.4% month-over-month, slightly outpacing the projected 0.3% increase and revised figures from September. These data points, coupled with Federal Reserve Chair Powell’s remarks underscoring a cautious approach to rate cuts, influenced traders' expectations. The probability of a Federal Reserve rate cut in December dropped sharply from approximately 80% to just over 50% within two days.

The market was further affected by a series of comments from Fed officials who discussed inflation and interest rate policies. Despite some progress in inflation, as noted by Fed’s Barkin, the sentiment that inflation data must continue improving was echoed by Fed’s Goolsbee. Meanwhile, Collin from the Boston Fed highlighted the possibility of policy relaxation in December, indicating economic resilience and potential future tariff-induced inflation pressures.

In other financial markets, the dollar index saw little movement, posting a marginal increase, while oil prices declined. December futures for West Texas Intermediate crude dropped by $1.68, closing at $67.02 per barrel, marking a 2.45% decrease. Similarly, Brent crude futures for January saw declines, shedding $1.52 to close at $71.04 per barrel.

Sector-wise, the information technology segment within the S&P 500 witnessed significant depreciation, declining by 2.49%. This was part of a broader theme where eight out of eleven major sectors reported losses, dragging the index further downward.

The overall market sentiment reflects a blend of economic factors and policy speculations, continuing to affect the performance and outlook of U.S. stocks, with short-term instability anticipated amidst these broader economic discussions and data interpretations.