12.02.202616:38:51UTC+00US Stocks Swing Sharply Lower

US stocks reversed early gains to close sharply lower on Thursday, extending the prior session’s volatility as renewed weakness in the tech sector and growing expectations of a more hawkish Federal Reserve weighed on sentiment ahead of Friday’s inflation data. The Nasdaq 100 dropped 1.5%, while the S&P 500 and the Dow each fell nearly 1%.

Stocks tied to artificial intelligence were notably volatile, reflecting doubts about the pace and sustainability of capital expenditure on compute infrastructure. At the same time, software services names remained under pressure amid concerns that AI-driven automation could erode demand across the sector. Shares of Apple, Amazon, Meta, Broadcom, and Palantir declined more than 3%.

Banks also faced selling pressure following a White House push to impose caps on credit card interest rates. Cisco sank 11% after issuing a weaker outlook. In contrast, McDonald’s gained 2% after reporting earnings, and Micron outperformed on signs of progress in its HBM4 production roadmap. Labor market data released on Wednesday prompted investors to push back expectations for the start of a new Fed rate-cutting cycle.