The U.S. stock market took a hit as Nvidia and other AI superstar stocks dropped due to concerns over high prices. The S&P 500 and Dow Jones fell significantly, with the Nasdaq also losing ground. Questions arise about the sustainability of AI stock gains and the impact on the market.

Wall Street fears potential interest rate cuts may not happen as expected, leading to a significant market decline. Traders worry about the impact on the economy and investments if rates remain unchanged. Expectations for a third rate cut by the Federal Reserve have decreased sharply in recent days.

The Federal Reserve faces challenges in decision-making due to the government shutdown delaying economic signals. The uncertainty surrounding the job market and inflation poses a dilemma for the Fed. Market volatility may increase as the government releases crucial economic data.

Disney and Cisco Systems experienced contrasting fortunes in the market, with Disney’s revenue falling short and Cisco’s profits exceeding expectations. Berkshire Hathaway, led by Warren Buffett, saw a rise in stock prices amidst the market decline. Overall, the S&P 500, Dow Jones, and Nasdaq experienced significant losses.

Treasury yields rose in the bond market, impacting stock prices and other investments. Stock markets in Europe declined, following modest gains in Asia. SoftBank Group’s struggles continued, with bitcoin also experiencing a price drop below $99,000.

Read more at Yahoo Finance: Wall Street drops to one of its worst days since April on worries about AI stocks and interest rates