Nasdaq leads declines as stocks extend slide

US tech stocks extended losses on Wednesday morning, coming off a steep sell-off fueled by worries about economic growth and the artificial intelligence trade amid a slide in Nvidia (NVDA) shares.

The S&P 500 (^GSPC) was just below the flat line, while the tech-heavy Nasdaq Composite (^IXIC) led the losses, declining about 0.4%. Meanwhile, the Dow Jones Industrial Average (^DJI) added about 0.2%.

Stocks are pulling back as Nvidia shares slump, an indication that faith in the AI boom that has driven much of this year’s gains is seeping out of the market. The AI juggernaut lost $279 billion in market value on Tuesday, and its shares were lower by about 1% Wednesday morning after US regulators reportedly stepped up an antitrust probe.

At the same time, concerns about cracks in the US economy have revived somewhat after a lukewarm reading on factory activity. Investors are keeping a watchful eye on fresh data as they calibrate the likely size of the Federal Reserve interest rate cut expected within weeks.

The rocky start to September now has investors bracing for more volatility as a historically tough month for stocks follows a turbulent August. Though markets managed to shake off that month’s losses, analysts suggest stocks may not be in the clear yet.

Also on Wednesday, data showed job openings fell to 7.67 million in July, the lowest level since January 2021 and another sign of labor market cooling. After the data, markets moved to price in a nearly 50% chance the Federal Reserve slashes interest rates by 50 basis points by the end of its September meeting, up from a 38% chance the day prior, per the CME FedWatch Tool.