WS #17005
The Nasdaq index suffered a 5.5% decline, erasing $2.5 trillion in market capitalization, as traders priced in an 80% chance of a December Fed rate hike. The selloff was led by mega-cap tech, with Tesla, Broadcom, and NVIDIA all falling over 9%. This move signals a shift from 'AI growth at any cost' to 'AI profitability or bust,' with investors fleeing high-multiple names in favor of defensive assets like Costco which remained flat. The market is now aggressively repricing the timeline for rate cuts, punishing growth stocks that rely on cheap capital.
Tech Selloff and AI Multiple Compression
The Nasdaq index suffered a 5.5% decline, erasing $2.5 trillion in market capitalization, as traders priced in an 80% chance of a December Fed rate hike. The selloff was led by mega-cap tech, with Tesla, Broadcom, and NVIDIA all falling over 9%. This move signals a shift from 'AI growth at any cost' to 'AI profitability or bust,' with investors fleeing high-multiple names in favor of defensive assets like Costco which remained flat. The market is now aggressively repricing the timeline for rate cuts, punishing growth stocks that rely on cheap capital.