US stock market sell‑off hits tech, AI amid Fed and inflation worries

On Friday, the S&P 500 and Nasdaq recorded their worst days of 2024, extending a broader sell‑off that also depressed bonds, Bitcoin and metals. The decline was driven by persistent inflation concerns and the prospect of further Federal Reserve rate hikes after a July jobs report showed unemployment rising to 4.3%, weakening expectations of a soft‑landing economy.

The turbulence was amplified by a rotation out of the “Magnificent Seven” high‑growth tech stocks, signalling cooling enthusiasm for AI‑driven growth. Former President Donald Trump signaled interest in a government stake in the AI sector and announced plans to meet top AI executives, adding a political dimension to investor unease.