Risk sentiment deteriorated sharply on Thursday despite federal agencies reopening after the longest government shutdown in U.S. history, as investors aggressively repriced Fed rate-cut expectations following a wave of hawkish remarks from central bank officials.
• DIS is among today’s weakest performers. See the market dynamics here.
Several Fed members struck a cautious tone on inflation. Boston Fed President Susan Collins, a voting member of the FOMC, said there remains a "high bar" for additional policy easing, while Minneapolis Fed's Neel Kashkari argued inflation "is still too high at 3%."
San Francisco Fed President Mary Daly added that policymakers "still have work to do" to bring inflation back to the 2% target.
The comments prompted a sharp pullback in rate-cut bets. Market-implied odds of a 25-basis-point rate cut in December fell below 50%, effectively turning the decision into a coin toss — a degree of uncertainty weighing on markets.
Traders also adopted a cautious stance ahead of a busy week of economic releases that could shape expectations for December's policy meeting. Yet, some key reports may remain delayed or incomplete.
White House Press Secretary Katherine Levitt said the October CPI and jobs data are unlikely to be released soon due to the shutdown's impact on data collection, while National Economic Council Director Kevin Hassett warned that "certain October figures may simply never show up." Stocks sold off broadly.
The S&P 500 slid 1.2%, while losses deepened in tech-heavy indices, with the Nasdaq 100 down 1.7%. The Dow Jones Industrial Average, which hit record highs on Wednesday, fell 0.7%.
Interest-rate sensitive small caps underperformed, with the Russell 2000 down 1.8%.
Among earnings movers, Walt Disney Co. (NYSE:DIS) tumbled 9% – the worst single-day drop since November 2022 – as overall revenue missed Street’s expectations. Cisco Systems Inc. (NASDAQ:CSCO) jumped 4.5% after beating analyst expectations and issuing positive guidance.
In commodities, crude oil rebounded 0.9% after tumbling 4.2% on Wednesday and gold edged 0.2% higher.
In the crypto markets, Bitcoin (CRYPTO: BTC) extended losses to near $100,000, dragging shares of Bitcoin-linked Strategy Inc. (NASDAQ:MSTR) down for the fourth straight session to their lowest level in over a year.
Thursday’s Performance In Major US Indices, ETFs
| Major Indices | Price | % Chg |
| Dow Jones | 47,875.12 | -0.8% |
| S&P 500 | 6,778.26 | -1.1% |
| Nasdaq 100 | 25,136.03 | -1.5% |
| Russell 2000 | 2,409.02 | -1.7% |
According to Benzinga Pro data:
- The Vanguard S&P 500 ETF (NYSE:VOO) fell 1.2% to $620.75.
- The SPDR Dow Jones Industrial Average (NYSE:DIA) sunk 0.9% to $478.28.
- The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) tumbled 1.7% to $611.
- The iShares Russell 2000 ETF (NYSE:IWM) dropped 1.8% to $239.24.
- The Health Care Select Sector SPDR Fund (NYSE:XLV) outperformed, up 1%; the Technology Select Sector SPDR Fund (NYSE:XLK) lagged, down 2%.
S&P 500’s Top 5 Gainers On Thursday
S&P 500’s Top 5 Losers On Thursday
Stocks reporting earnings after the close include Applied Materials (NASDAQ:AMAT), Copart Inc. (NASDAQ:CPRT), and Woodward Inc. (NASDAQ:WWD).
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