Market Volatility: The Federal Reserves Shift Impacts Tech and AI StocksThe stock market, particularly the S&P five hundred and Nasdaq, reached record highs this year due to robust company earnings and AI investments. However, both indexes peaked on October twenty-ninth, the same day the Federal Reserve cut interest rates for the second time. Federal Reserve Chair Jerome Powells statement that a third rate cut in December was not guaranteed, along with growing hesitation from Fed officials, has significantly altered expectations for future rate cuts. The probability of a December rate cut has plummeted from over ninety percent to as low as forty percent. This shift has affected riskier assets, with the S&P five hundred down about three percent and tech and AI companies, such as those in the Philadelphia Semiconductor Index, experiencing losses nearing ten percent. Even Bitcoin, often a sign of broader risk appetite, is down twenty percent. This situation indicates that some of the markets exuberance may be deflating, with the Federal Reserves more cautious stance particularly impacting rate-sensitive AI and tech stocks that drove much of the growth earlier this year.

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