US tech valuations stretched further as earnings contribute less

US tech companies’ share of S&P 500 earnings has been slipping even as their contribution to the index’s market value remains near multi-decade highs, raising concerns that their prices are further removed from underlying profit trends.

According to a Reuters analysis, tech companies accounted for 20.8% of the S&P 500’s total earnings in the third quarter, down from 22.8% three quarters earlier. At the same time, their share of the index’s market capitalization rose to 31.1% as of Friday, compared with about 30% at the start of the year.

Analysts warn that this disconnect, combined with the sector’s outsized weight in passive portfolios, could magnify any disappointment in earnings and trigger broader index-level declines.

“The wider gap between the tech sector’s percentage in the S&P 500 market cap is partly justified by genuine future earnings power and FCF (free cash flow) growth, but not entirely,” said Illia Kyslytskyi, head of research at Yaru Investments.

Tech stocks have driven the market to fresh record highs on expectations that AI will generate outsized profits, leaving valuations increasingly dependent on rapid earnings growth.

The tech-heavy Nasdaq Composite Index was trading at a forward P/E of 29.28 based on current-year earnings estimates, well above its 10-year average of 23.48 and higher than the S&P 500’s 24.35.

Although the tech sector delivered strong profits in the September quarter, led by AI names such as Nvidia, some analysts said the outlook for future earnings hinges on how effectively AI translates into revenue for clients, and how efficiently providers deploy their spending.

Alexander Lis, chief investment officer at Social Discover Ventures, said the so-called “Magnificent 7” tech stocks saw margins temporarily boosted by AI-related capex, with suppliers booking revenue upfront, suggesting profitability could normalise as spending slows.

The Nasdaq index is up 18.4% so far this year but has fallen over 3.5% this month.

Derek Izuel, portfolio manager at Shelton Capital Management, said tech stocks could see a mid-single-digit pullback if earnings fail to keep pace with valuations.

“A more severe pullback that results in the risk premium back to normal would be closer to a double-digit decline.”

(Reporting By Patturaja Murugaboopathy; with additional reporting by Gaurav Dogra in Bengaluru; Editing by Vidya Ranganathan)

Nikkei to rise about 7% by mid-2026 on corporate earnings, economic stimulus

TOKYO, Nov 26 (Reuters) – Japan’s Nikkei share average is seen rising about 7% by June next year, supported by strong corporate earnings and economic growth driven by Prime Minister Sanae Takaichi’s government stimulus.

The cabinet last week approved a 21.3 trillion yen (USD 136 billion) economic stimulus package, the largest since the COVID-19 pandemic, to help households cope with persistent inflation.

Since Takaichi took office last month, expectations for aggressive economic stimulus have driven sharp gains in Japanese equities. In October, the Nikkei crossed the 50,000 mark for the first time and climbed 16.64%, its biggest monthly gain in 35 years.

Super-long bond yields have recently hit record highs and the Japanese currency 10-month lows. The Nikkei hit an intraday record high of 52,636.87 on November 4, but has since eased back.

The index is forecast to trade at 52,000 at the end of June in 2026, according to the median estimate of 16 analysts polled November 13-25, from Tuesday’s close of 48,660.

It is forecast to exceed all-time highs marked this month by the end of next year, rising to 55,000, up about 13%.

“The rally in October was too fast, and there was a risk of retreat,” said Kazunori Tatebe, chief strategist at Daiwa Asset Management.

“But the fundamentals have not worsened, and the market will continue to see positive market-moving cues, such as inflation, governance reforms, and corporate share buybacks”.

The index retreated from its peak in recent sessions as US stocks lost ground on divided views on the Federal Reserve’s rate path and concerns over valuations of artificial intelligence-related technology shares.

The latest Nikkei rally was supported by a few beneficiaries of the AI sector, such as chip-related Advantest and Tokyo Electron, as well as technology investor SoftBank Group.

Some strategists said there was a chance of a correction of more than 10% in the Nikkei in the next three months.

“The US market could fall as it is in the transition from the liquidity-driven market to profit-driven,” said Hiroshi Namioka, chief strategist at T&D Asset Management. “That decline may affect the Japanese market.”

(USD 1 = 156.7100 yen)

(Reporting by Junko Fujita; Additional reporting by Rocky Swift; Polling by Aman Kumar Soni and Jaiganesh Mahesh; Editing by Ross Finley and Louise Heavens)

Bitcoin on thin ice after sinking in flight from risk

SINGAPORE/LONDON — Bitcoin dropped to a seven-month low on Friday, closing in on the USD 80,000 level below which some analysts say much heavier losses are likely for the world’s largest cryptocurrency.

Bitcoin fell to USD 80,553, and ether hit a four-month low, as cryptocurrencies led a broad flight from riskier assets, spurred by investor worries over lofty tech valuations and uncertainty over near-term U.S. interest rate cuts.

Cryptocurrencies are often viewed as a barometer of risk appetite and their slide highlights how fragile the mood in markets has turned in recent days, with high-flying artificial intelligence stocks tumbling and volatility spiking.

Bitcoin is down 12% for the week. Its slide follows a stellar run this year that propelled it to a record high above USD 120,000 in October, buoyed by favorable regulatory changes towards crypto assets globally.

But analysts say the market remains scarred by a record single-day slump last month that saw more than USD 19 billion of positions liquidated.

As it plunged through USD 100,000 last week and headed for USD 80,000 on Friday, some analysts said bitcoin was reaching levels that corporate and institutional investors on average paid for their tokens, and where they might have to sell to prevent losses.

Bitcoin has erased all its year-to-date gains and is now down 12% for the year, while ether has lost close to 19%.

“If it’s telling a story about risk sentiment as a whole, then things could start to get really, really ugly, and that’s the concern now,” Tony Sycamore, a market analyst at IG, said of the fall in bitcoin.

Crypto Treasuries

The plunge on Friday will compound problems for so-called crypto treasury companies, which have been big buyers of bitcoin and other cryptocurrencies this year.

These companies hold the crypto on their balance sheets in the hope the price rises. Standard Chartered has estimated that a drop below USD 90,000 for bitcoin could leave half of these companies’ holdings “underwater” – a term which typically refers to holding assets worth less than what was paid for them.

Analysts say the companies could be forced to raise new funds or sell down their crypto holdings, putting further downward pressure on prices.

Listed companies collectively hold 4% of all the bitcoin in circulation, and 3.1% of ether, Standard Chartered estimates.

“The procyclical nature of bitcoin treasury companies is fully obvious now, if it wasn’t obvious six months ago,” Brent Donnelly, president at analytics firm Spectra Markets, said in a note.

“They buy high and now some of them are selling low.”

Citi analyst Alex Saunders said USD 80,000 would be an important level as it is around the average level of bitcoin holdings in exchange-traded funds.

About USD 1.2 trillion has been wiped off the market value of all cryptocurrencies in the past six weeks, according to market tracker CoinGecko.

Shares in the bitcoin buyers soared earlier this year but have fallen sharply in recent months. Strategy, the biggest of the treasury firms, has seen its shares tank 61% since a July peak, leaving them down nearly 40% year-to-date.

JP Morgan said in a note this week that Strategy could be excluded from some MSCI equity indexes, which could spark forced selling by funds that track them.

Japanese peer Metaplanet has tumbled about 80% from a June peak.

Donnelly notes that bitcoin selloffs in 2018 and 2022 saw prices drop around 75% to 80%, which if repeated could see a plunge to as low as USD 25,000.

“I am not saying we are in crypto winter. Just offering a reminder that 75%/80% drawdowns have been part of the game in bitcoin,” he wrote.

(Reporting by Rae Wee, Niket Nishant and Vidya Ranganathan. Editing by Kevin Buckland and Mark Potter)

Asian stocks sink as US jobs fail to clear rate outlook, tech hammered

SYDNEY – Asian shares extended a global rout on Friday as the much anticipated US jobs data failed to provide clarity on interest rates, with investors returning to dumping riskier assets even after Nvidia’s earnings dazzled.

Japan’s Nikkei tumbled 2% on Friday, Australia’s resources-heavy shares slid 1.4%, while South Korea plunged almost 4%.

Wall Street dived overnight as jitters over inflated tech stock prices returned after temporary relief from Nvidia’s stellar forecasts, resulting in the Nasdaq’s widest one-day swing since April 9 when President Donald Trump’s “Liberation Day” tariffs spooked markets.

Data showed the US economy added more jobs than expected in September, but a rise in the unemployment rate and downward revisions to prior months painted an ambiguous picture for the Federal Reserve as it considers whether a cut in interest rates is needed next month to bolster the labor market.

Treasury yields fell as futures moved to imply a 40% probability of a US rate cut in December, up from 30% a day earlier, but still not enough to convince investors of a December move, with the next payrolls numbers available only after the Fed meeting.

“The markets had plenty to be positive about and initially Nvidia’s banging quarterly results meant Wall Street burst out of the gates. The US jobs data was probably as good as you could have hoped for too,” said Kyle Rodda, a senior analyst at Capital.com.

“However, the momentum simply was not there to carry the rally through, with the passing of two critical risk events – both with positive outcomes, no less – not enough to kill the bearishness gripping the markets currently.”

There are now more concerns about financial market stability among Fed officials, including the potential for a sharp drop in asset prices, as they debate when and even whether to cut interest rates further.

Cleveland Fed President Beth Hammack warned on Thursday that cutting rates further right now carries a wide range of risks for the economy. Fed Governor Lisa Cook sees a risk of outsized asset price declines.

In the currency markets, the dollar jumped on the risk-sensitive commodity currencies, hitting a three-month high on the Aussie and a fresh seven-month top on the kiwi.

It was steady at 157.50 yen, after scaling a new 10-month peak of 157.9 overnight, as traders stayed on high alert for intervention from Japanese authorities given the yen’s recent rapid fall.

Data showed Japan’s core consumer prices rose 3% in October, keeping alive expectations of a near-term interest rate hike. However, prospects of economic stimulus from Japan’s new government, led by Prime Minister Sanae Takaichi, have undermined the yen.

The government is set to unveil an economic stimulus package worth over 20 trillion yen, the biggest since COVID-19, on Friday.

Treasuries rose overnight as investors raised bets for a Fed cut next month. Two-year Treasury yields slipped 1 basis point to 3.545%, having fallen 4 basis points overnight, while the 10-year yield was steady at 4.092%, after easing 3 bps overnight.

Oil prices fell in early trade. US West Texas Intermediate crude dropped 0.9% to USD 58.47, and was down 2.7% this week.

Spot gold prices were flat at USD 4,077 per ounce, having been little moved overnight.

(Reporting by Stella Qiu; Editing by Shri Navaratnam)

Dollar set for weekly gain as Fed cut bets recede; yen intervention eyed

SINGAPORE – The dollar was on track for its best week in over a month on Friday as investors wagered the Federal Reserve is unlikely to cut rates next month, with the case for further easing made no clearer by a confounding US jobs report.

The yen briefly popped higher on Friday after Japanese Finance Minister Satsuki Katayama said intervention was a possibility in dealing with excessively volatile and speculative moves, in an escalation of jawboning from Tokyo to stem a sliding currency.

The release of the delayed US nonfarm payrolls report on Thursday painted a mixed picture of the country’s labor market, showing employment growth accelerated in September, but the jobless rate rose to 4.4%, its highest level in four years.

That reinforced the view that the Fed is likely to hold off on cutting rates at its December meeting, as policymakers continue to sail through an economic fog brought about by the US government shutdown.

Against the dollar, the euro was pinned near a two-week low and last bought USD 1.1528, on track for a weekly decline of 0.8%.

Sterling rose 0.11% to USD 1.3084, though was set to lose 0.7% for the week, with investors also anxiously awaiting Britain’s upcoming budget in a major test for the nation’s currency and bond markets.

The dollar index, which measures the greenback against a basket of peers, flirted with a 5-1/2-month peak and last stood at 100.20. It was on track to clock a weekly gain of 0.9%, its best performance in over a month.

“The shutdown-delayed September jobs report did not provide clarity on what the FOMC will do at its much-debated December meeting,” said economists at Wells Fargo in a note.

“We remain of the view that what the Fed should do is cut the federal funds rate by 25 bps… That said, what the Fed will do is a separate debate entirely,” said the economists, who added that their call for lowering rates in December was a “close” one and that a hold “would not surprise us at this point”.

Markets are now pricing in just a 27% chance of the Fed easing rates next month.

In other currencies, the Australian dollar was up 0.09% at USD 0.6446, after sliding 0.6% overnight on a broad risk-off mood in markets.

The New Zealand dollar rose 0.11% to USD 0.5588, having also lost 0.4% on Thursday.

TUMBLING YEN RAISES INTERVENTION THREAT

Much of the focus in the currency market this week has been on a sliding yen, which has plumbed fresh lows as investors fret about the nation’s worsening fiscal position brought about by Prime Minister Sanae Takaichi’s lavish stimulus package.

The cabinet plans to approve the package set to be worth some 21.3 trillion yen (USD 135.29 billion) later on Friday.

“At the very heart the problem is politicians making promises to electorates which defy economic reality,” said James Athey, a fixed income portfolio manager at Marlborough in London, referring to the steep selloff in Japanese bonds and the currency this week.

The yen languished near a 10-month low and was last at 157.33 per dollar, having bottomed at 157.90 in the previous session. It was set to lose nearly 2% for the week, its worst performance in over a month.

“The elephant in the room now is mounting intervention risks,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho. “Interventions are likely to be opportunistic and short-lived. Essentially, speed bumps, not barricades.”

Tokyo last spent 5.53 trillion yen, or nearly USD 37 billion, in July 2024 intervening in the foreign exchange market to haul the yen away from 38-year lows.

Separately, data on Friday showed Japan’s core consumer prices rose 3.0% in October from a year earlier, staying above the central bank’s 2% target and keeping alive expectations of a near-term interest rate hike.

(USD 1 = 157.4400 yen)

(Reporting by Rae Wee; Editing by Jamie Freed)

US yields drop as unemployment rises in September

NEW YORK – US Treasury yields fell on Thursday after data showed that the US unemployment rate rose in September even as employers added more jobs than economists had expected during the month, with traders now seeing an increasing chance of a Federal Reserve rate cut in December.

Nonfarm payrolls increased by 119,000 jobs in September. Economists polled by Reuters had forecast 50,000 jobs would be added. The unemployment rate rose to 4.4%, from 4.3% in August.

“Depending on your priors from the Fed, it probably gives both the hawks and the doves something to confirm what they thought,” said Jan Nevruzi, US rates strategist at TD Securities in New York.

Treasuries rallied, however, with yields falling, as traders brought the pricing of a December rate cut back closer to 50-50, he said.

Traders have repriced for falling odds of a December rate cut in the past week as many Fed policymakers express concerns about further easing due to still elevated inflation.

Fed funds futures traders are now pricing in a 39% chance of a December rate cut, up from 30% on Wednesday, according to the CME Group’s FedWatch Tool.

The 2-year note yield, which typically moves in step with Fed rate expectations, was last down 3.8 basis points on the day at 3.56%. The yield on benchmark US 10-year notes fell 2.1 basis points to 4.11%.

The two-year, 10-year Treasury yield curve steepened to 54.8 basis points.

Other data on Thursday showed that the number of Americans filing new applications for unemployment benefits fell last week.

The federal government is pushing out delayed economic reports after reopening last week from a record 43-day shutdown. The data fog is adding to uncertainty over Fed policy as many policymakers express concerns about further rate cuts due to sticky inflation.

The US Bureau of Labor Statistics said on Wednesday it will release a combined jobs report
for October and November on December 16, after the Fed’s December 9-10 policy meeting. The October data will lack the unemployment rate, however, as it was unable to collect the data during the shutdown.

Minutes from the Fed’s October meeting, released on Wednesday, show that a divided Fed cut interest rate last month even as policymakers cautioned that doing so could risk entrenched inflation and a loss of public trust in the US central bank.

The Treasury will sell USD 19 billion in 10-year Treasury Inflation-Protected Securities on Thursday.

(Reporting by Karen Brettell, editing by Deepa Babington and Chizu Nomiyama )

Delay in US jobs data boosts Treasury yields, dims rate cut hopes

NEW YORK – Treasury yields rose on Wednesday after the US government said jobs data for October and November will not come out before the Federal Reserve’s December meeting, leading traders to reduce bets on an interest rate cut that month.

The US Bureau of Labor Statistics said it will release a combined jobs report for the two months on December 16, after the Fed’s December 9-10 policy meeting.

October’s unemployment rate, however, will never be known as the government was unable to collect data during its record 43-day shutdown that ended last week.

Several Fed policymakers have expressed concerns over further rate cuts due to still elevated inflation.

“Several of the hawks have indicated that without the data they would prefer to see evidence that they needed to cut further. So I think that played into the market’s fear that they’re not going to be cutting rates,” said Kim Rupert, managing director at Action Economics in San Francisco.

Fed funds futures traders are now pricing in only 27% odds of a rate cut in December, down from 45% earlier on Wednesday.

Minutes from the Fed’s October meeting released on Wednesday showed that a divided US central bank cut rates even as policymakers cautioned that lower borrowing costs could risk undermining the fight to quell inflation.

The data fog is adding to an already uncertain Fed picture and keeping Treasury yields in a relatively tight range.

“We’ve been so deprived of top-tier economic data for so long, it’s hard to reach a max conviction position on the current state of the US economy until we begin to see the data come through,” said Michael Lorizio, head of US rates and mortgage trading at Manulife Investment Management in Boston.

The 2-year note yield, which typically moves in step with Fed interest rate expectations, was last up 1 basis point on the day at 3.592%. The yield on benchmark US 10-year notes rose 0.4 basis points to 4.127%.

The yield curve between 2-year and 10-year notes flattened to 52.9 basis points.

This week’s main economic release will be September’s monthly jobs report on Thursday. Economists polled by Reuters expect it to show employers added 50,000 jobs during the month.

Data on Wednesday showed the US trade deficit narrowed more than expected in August as imports declined.

The Treasury also sold USD 16 billion in 20-year bonds on Wednesday to mediocre demand.

The bonds sold at a high yield of 4.706%, only a fraction of a basis point higher than where they traded before the auction. Demand was 2.41 times the amount of debt on offer, the lowest since February 2024.

The US government will also sell USD 19 billion in 10-year Treasury Inflation-Protected Securities on Thursday.

(Reporting by Karen Brettell, Editing by Franklin Paul)

Wall Street indexes end rocky session higher; Nvidia gains after hours

NEW YORK – US stocks ended a choppy session higher on Wednesday, bouncing off recent losses as technology stocks rose ahead of Nvidia’s quarterly results.

Nvidia shares gained more than 5% after ending the regular session up 2.8% as the artificial intelligence leader forecast fourth-quarter revenue above Wall Street estimates. Shares of Advanced Micro Devices rose 2.8% after the bell, while Alphabet was up 1.6% and Palantir Technologies was up 4%.

“The market is breathing a big, collective sigh of relief because Nvidia is confirming that AI demand is strong,” said Adam Sarhan, chief executive of 50 Park Investments in New York.

“If it sticks and stays by tomorrow’s close … this little pullback in the market could end.” The S&P 500 is still down more than 3% from its October highs.

Indexes briefly pared gains during the regular session after minutes from the last Federal Reserve meeting showed policymakers cautioned that lower borrowing costs could undermine the fight against inflation. The Fed cut rates by a quarter of a percentage point at each of its meetings in September and October.

Worries about a cooling labor market persisted ahead of Thursday’s release of the September US jobs report following the record-long US government shutdown. The US Bureau of Labor Statistics said it will not publish the October employment report, but will instead combine nonfarm payrolls for that month with November’s report.

Nvidia’s results have been seen as a test for the AI-driven rally that has powered the market to record highs this year.

The Dow Jones Industrial Average rose 47.03 points, or 0.10%, to 46,138.77, the S&P 500 gained 24.84 points, or 0.38%, to 6,642.16, and the Nasdaq Composite advanced 131.38 points, or 0.59%, to 22,564.23.

Investors have worried about how companies will be able to make money from their huge investments in AI.

Among decliners, Target shares fell 2.8% after the retailer reported a bigger-than-expected drop in quarterly sales as cash-strapped US consumers cut back on discretionary spending.

Shares of Walmart, which is due to report earnings on Thursday before the bell, ended 0.8% lower.

Declining issues outnumbered advancers by a 1.59-to-1 ratio on the NYSE, where there were 55 new highs and 211 new lows.

On the Nasdaq, 1,846 stocks rose and 2,851 fell, as declining issues outnumbered advancers by a 1.54-to-1 ratio.

The S&P 500 posted 12 new 52-week highs and 22 new lows while the Nasdaq Composite recorded 48 new highs and 305 new lows.

Volume on US exchanges was 17.46 billion shares, compared with the roughly 20.2 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch and Chuck Mikolajczak in New York; additional reporting by Shashwat Chauhan and Twesha Dikshit in Bengaluru; Editing by Krishna Chandra Eluri, Maju Samuel, and Richard Chang)

Foreign demand for US Treasuries slips in September, but Japan steps up buying

NEW YORK – Foreign holdings of US Treasuries slipped in September, data from the Treasury Department showed on Tuesday, declining for the first time in six months.

The Treasury finally released capital flows data after the federal government’s 43-day shutdown. Data for October will be released on December 18, the Treasury said.

Holdings of US Treasuries edged lower to USD 9.249 trillion in September, slightly down from USD 9.262 trillion in August. But compared with a year earlier, Treasuries owned by foreigners were up 5.5%.

Japan remained the largest non-US holder of Treasuries with USD 1.189 trillion in September, its biggest holdings since August 2022, when their stash of US government debt hit USD 1.196 trillion. Japan’s holdings have increased for nine straight months.

China’s holdings of Treasuries, on the other hand, dipped to USD 700.5 billion in September from USD 701 billion in August. In July, its cache of Treasuries had fallen to USD 696.9 billion, the lowest since October 2008 when holdings tumbled to USD 684.1 billion.

The world’s second-largest economy is the third-largest holder of US Treasuries, behind the United Kingdom.

It has been a gradual reduction of US Treasury holdings for China over the past decade, which reflects both strategic and market-driven considerations, analysts said. Strategically, Beijing has sought to lessen its dependence on the US dollar for reserves, trade settlement, and investment purposes.

China has also been trimming its Treasury portfolio to support the yuan. Analysts noted that a slowing economy, lingering post-COVID challenges, and rising trade barriers have curbed export inflows, adding pressure on Beijing to shore up its currency.

UK investors, meanwhile, also reduced their load of Treasuries to USD 865 billion in September, down from USD 904.3 billion in August.

On a transaction basis, foreign purchases of Treasuries fell to USD 25.5 billion in September, down from USD 48.5 billion in August and USD 44.6 billion in July. In May, there were foreign inflows of USD 147.4 billion in Treasuries, the largest since August 2022.

Foreign investors, meanwhile, snapped up USD 132.9 billion in US equities in September, up from USD 89.4 billion, and a massive improvement from outflows of USD 16.2 billion seen in July.

Data also showed that the net capital inflow into the United States totaled USD 190.1 billion, higher than the USD 187.1 billion in August. In July, there was a net capital outflow of USD 6.6 billion.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Lincoln Feast)

S&P 500 ends down for a 4th day as valuation worries weigh, Home Depot drops

NEW YORK – US stocks ended lower on Tuesday, with the S&P 500 putting in a fourth straight session of losses as valuation worries hit big technology-related shares and a disappointing forecast pressured Home Depot.

The four-day drop was the benchmark’s longest losing streak in three months.

Adding to caution, quarterly results from artificial intelligence and market leader Nvidia are due after the bell on Wednesday. The US earnings season is near its end, but Nvidia’s results will be closely watched by investors worried about market gains tied to AI exuberance. Nvidia’s shares were 2.8% lower on the day.

The September US jobs report is set to be released on Thursday after being delayed because of the long government shutdown. Earlier private market surveys have pointed to a cooling labor market. Data Tuesday showed the number of Americans on jobless benefits surged between mid-September and mid-October.

Shares of Home Depot dropped 6% after the home improvement chain gave a forecast for full-year profit that disappointed and missed quarterly earnings estimates.

“You’re having this massive sentiment correction during a period where earnings is delivering maybe above bull expectations, and, yet, there’s so much fear circulating in the market,” said Marta Norton, chief investment strategist at retirement and wealth services provider Empower.

The Dow Jones Industrial Average fell 498.50 points, or 1.07%, to 46,091.74, the S&P 500 lost 55.09 points, or 0.83%, to 6,617.32 and the Nasdaq Composite lost 275.23 points, or 1.21%, to 22,432.85.

Home Depot aside, earnings for this reporting period have been much stronger than expected. Year-over-year earnings growth for the S&P 500 is now at 16.9%, well above the 8.8% estimated at the start of October, according to the most recent LSEG data.

Indexes pared losses by midday before falling again. Some equities traders viewed the recent selloff as overdone, with traders at Jefferies, for instance, writing in a note that the market could be setting up for a bounceback. They noted that while megacaps are selling off sharply, “action under the hood is more mixed/slightly encouraging.”

Six of the 11 major S&P 500 sectors ended higher on the day, and the Russell 2000 small-cap index gained 0.3%. Among other megacaps that ended sharply lower, Amazon.com was down 4.4%.

Concerns over high valuations and dwindling expectations of a December interest rate cut have led to a pullback in US stocks, with the S&P 500 down about 4% from its October peak.

The S&P 500 and the Nasdaq both closed below their 50-day moving averages on Monday, an important technical threshold, for the first time since late April.

On the Nasdaq, 2,353 stocks rose and 2,350 fell as advancing issues outnumbered decliners by a 1-to-1 ratio.

Volume on US exchanges was 18.66 billion shares, compared with the 20.2 billion average for the full session over the last 20 trading days.

(Additional reporting by Shashwat Chauhan and Twesha Dikshit in Bengaluru and Chuck Mikolajczak in New York; Editing by Shilpi Majumdar, Krishna Chandra Eluri, and Aurora Ellis)

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