Stocks experienced a significant decline, marking the third consecutive drop in trading days due to concerns over an economic slowdown and repositioning on Wall Street. The Dow Jones Industrial Average fell 1,034 points, the Nasdaq Composite dropped 3.4%, and the S&P 500 slid 3%, with the Dow and S&P 500 heading for their biggest daily losses since September 2022. The sell-off began in Japan, where the Nikkei plunged 12.4% in response to a disappointing U.S. jobs report. Despite calls for the Federal Reserve to cut rates sooner, the ISM data showed healthy demand in services businesses, leading to some recovery. The market retreat was also attributed to the unwinding of the “carry trade” and concerns over artificial intelligence investments. Tech giants like Nvidia, Intel, Microsoft, and Alphabet posted losses, while Apple dropped 5% following Warren Buffett’s decision to sell half of his Apple holdings. Analysts believe the sell-off was driven by profit-taking after the market’s strong performance, suggesting that the recent downturn reflects a need to capitalize on gains made during a period of significant growth. Michael Farr, CEO of Farr, Miller & Washington, highlighted the sentiment-driven nature of the market and emphasized the importance of recognizing when to secure profits. Overall, the sell-off underscored a shift in market dynamics, prompting investors to reassess their positions in response to changing economic conditions.
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