Tech Titans Tumble Amid Rate Cut Speculations: Nasdaq Dips Sharply

The Nasdaq closed significantly lower due to losses in major tech stocks including Nvidia, Apple, and Tesla. The S&P 500 also fell as soft inflation data heightened expectations of a Federal Reserve rate cut in September. Smaller companies saw gains as investors rotated their focus.

The Nasdaq ended sharply lower on Thursday, driven by losses in major tech stocks like Nvidia, Apple, and Tesla, as investors pivoted to smaller companies following softer-than-anticipated inflation data. This shift has bolstered bets that the Federal Reserve will cut interest rates in September.

The S&P 500 also experienced a drop after a report from the Labor Department revealed an unexpected decline in U.S. consumer prices in June, marking the smallest annual increase in a year. Consequently, the likelihood of a rate cut in September has surged, with interest rate futures pointing to a 90% chance, up from 74% on Wednesday, according to CME Group's Fedwatch.

Despite easing inflationary pressures, high-value stocks like Microsoft, Meta Platforms, and Amazon lost ground. Tesla dipped following Bloomberg News reports that its robotaxi launch would be delayed by about two months. However, smaller companies, represented by the Russell 2000 index, surged to a three-month high, as investors believe imminent rate cuts would benefit these firms.