Tech shares led Wall Street stocks lower Thursday as markets digested recent equity gains amid rising expectations for the Federal Reserve to cut interest rates.
Briefing.com analyst Patrick O’Hare described the pullback as a “little bit of natural consolidation in a lightly traded market” following the market’s advance in recent days.
O’Hare also cited relatively robust US services industry data for August that could lessen the likelihood of a larger half percentage point interest rate cut when the Fed meets in September.
Futures markets are betting on a quarter-point reduction.
The Dow Jones Industrial Average dropped 0.4 percent to 40,712.78.
The broad-based S&P 500 shed 0.9 percent to 5,570.64, while the tech-rich Nasdaq Composite Index tumbled 1.7 percent to 17,619.35.
Evidence of a slowing US employment market, along with ebbing inflation, have boosted expectations for Fed interest rate cuts.
Fed Chair Jerome Powell is scheduled to deliver an address on Friday at a central banker gathering in Wyoming.
Chip companies were also in retreat, with Nvidia losing 3.7 percent, Intel 6.1 percent and Micron 3.8 percent.
Among individual companies, Williams-Sonoma slumped 9.3 percent as it trimmed its full-year revenue outlook, with sales now expected to fall between 1.5 percent and four percent. On the positive side, the retailer lifted its profit margin projection.