Tech Pullback Weighs in on Wall Street as the Dollar Retreats

US stocks slipped on Tuesday, with technology names taking the brunt of the losses as investors braced for potential disruption in the AI chip landscape. The competitive tension between Nvidia Corp. and Alphabet Inc. has intensified, raising questions about how the chip market may evolve amid the rapid expansion of artificial intelligence.

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The S&P 500 edged lower after starting the day relatively flat, as traders worked through a batch of delayed economic figures. The Nasdaq 100, which had staged an impressive rally the previous session on hopes of a near-term Federal Reserve rate cut, pulled back as much as 1.3%.

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Alphabet was one of the day’s standout performers, jumping more than 1% and inching closer to the $4 trillion market-cap milestone. The move followed a report from The Information indicating that Meta Platforms Inc. is considering a multibillion-dollar investment into Google’s AI chips. In contrast, Nvidia tumbled roughly 6%, while other chip and software names including Advanced Micro Devices Inc. and Oracle Corp. also came under pressure.

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“Nvidia is the largest holding in my portfolio, and a 3% pullback doesn’t concern me at all,” said Fares Hendi, global fund manager at Prevoir Asset Management in Paris. “Seeing Google push deeper into this market is a sign of its enormous long-term opportunity. In a healthy, competitive system, this type of development is normal.”

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Earlier in the morning, delayed economic releases showed that U.S. retail sales posted a modest gain in September. Meanwhile, wholesale inflation accelerated, driven by rising costs in energy and food categories. The dollar eased following the data, and Bitcoin briefly slipped below $88,000. Yields on 10-year Treasuries dipped as privatepayrolls figures signaled a cooling labor market.

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With limited new data expected ahead of the Federal Reserve’s December meeting, traders are paying close attention to any numbers that may influence the central bank’s path. Money markets now reflect roughly an 80% probability of a rate cut in December. After weeks of fluctuating expectations, the odds have firmed up in recent days as several Fed officials have leaned more dovish in their public comments.

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In commodities, crude oil prices dropped sharply after ABC News reported that Ukraine and Russia had reached an updated peace framework though several smaller points still need to be finalized. The prospect of reduced geopolitical risk weighed quickly on energy markets.

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Here’s a look at the day’s key market moves:

Stocks

• The S&P 500 slipped 0.3% as of 9:52 a.m. in New York.
• The Nasdaq 100 dropped 0.9%.
• The Dow Jones Industrial Average was mostly unchanged.
• Europe’s Stoxx 600 advanced 0.8%.
• The MSCI World Index declined 0.2%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%.
• The euro strengthened 0.4% to $1.1567.
• The British pound climbed 0.6% to $1.3178.
• The Japanese yen gained 0.5%, trading around 156.03 per dollar.

Cryptocurrencies

• Bitcoin declined 2.7% to $86,373.20.
• Ether slipped 2.8% to $2,876.47.

Bonds

• The 10-year U.S. Treasury yield dropped two basis points to 4.01%.
• Germany’s 10-year yield also fell two basis points to 2.67%.
• The U.K.’s 10-year gilt yield slid four basis points to 4.50%.

Commodities

• West Texas Intermediate crude retreated 2.2% to $57.57 a barrel.
• Spot gold eased 0.4% to $4,119.45 an ounce.

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While volatility has reasserted itself across U.S. markets, particularly within tech and AI-related sectors, many investors see the recent pullback as a normal reset rather than a signal of deeper trouble. With the Federal Reserve meeting just weeks away and expectations leaning toward a shift in monetary policy, markets may remain sensitive to economic data and corporate developments.

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The escalating competition in AI hardware highlighted by new interest in Google’s chips from major customers like Meta adds another layer of complexity for traders watching the tech sector.

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For long-term investors, however, the broader takeaway remains that AI continues to draw extraordinary investment, suggesting significant opportunity even as leadership within the chip industry evolves.

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