Stock market today: Live updates

Stocks retreated on Thursday after a continued market rotation powered the Dow Jones Industrial Average to fresh highs.

The blue-chip Dow lost 311 points, or 0.6%. The S&P 500 shed 1%, with declines in the communication services and information technology sectors leading the way. The Nasdaq Composite pulled back 1.7%.

Despite the Nasdaq starting off the week strong, pressure has since resumed as investors continued to rotate out of technology stocks, especially those in the artificial intelligence trade, amid worries about their valuations. The tech-heavy index was on track to close with a third straight day of losses Thursday, weighed down by heavyweights Nvidia, Broadcom and Alphabet.

Disney was one the key laggards during the session as well, with shares falling 8% on mixed results for the company’s fiscal fourth quarter.

Wednesday again saw a divergence between tech stocks and other pockets of the market as value-oriented sectors such as health care outperformed. While the Nasdaq finished the day in the red, the Dow closed above 48,000 for the first time, putting the 30-stock index on pace for its best weekly performance since late June. The rotation has been a relief for some investors looking for a broadening out of the market, but it could also signal growing caution away from risk-on assets.

“We have rebounded in dramatic fashion from the April lows,” said Eric Teal, chief investment officer at Comerica Wealth Management. “Most importantly, the market is broadening out beyond just growth and technology, including industrials, financials, and healthcare. Small-cap stocks are also participating in the rally as lower short-term interest rates have been a harbinger for small-cap outperformance.”

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Investors were optimistic during Wednesday’s session that the U.S. government shutdown — the longest in history — would end after lasting six weeks. That outcome came to fruition that evening, when President Donald Trump signed into law a funding bill to reopen the federal government. The bill, which had been passed by the House of Representatives earlier in the night, will fund government operations through the end of January.

The extended stoppage caused investors to fly blind without key economic reports, such as the October jobs report and inflation data, and contributed to the market’s recent choppiness. White House press secretary Karoline Leavitt told reporters on Wednesday that these reports may ultimately never be released, and that the shutdown could lower fourth-quarter economic growth by up to 2 percentage points. Most economists expect minimal impact to U.S. GDP, however.

“The gears of the government should be working again soon, and while that is a relief for markets and the economy, there is still plenty of uncertainty, particularly around the missed inflation and jobs data and how these fronts have been faring,” said Carol Schleif, chief market strategist at BMO Private Wealth. “While we have always expected that many of the data points missed during the shutdown will remain dark, there are questions about what the inflation and jobs data will look like once these reports come back online.”

“We would not be surprised to see some market chop over the coming weeks as the government gears and economic data presses get turning again,” she added.

The blackout posed a challenge for the data-dependent Federal Reserve, increasing investor pessimism about the prospect of lower interest rates. Still, Schleif said she expects the central bank to cut its benchmark overnight borrowing rate at its upcoming meeting in December. Markets are rather split on the likelihood of that happening, currently pricing in a more than 51% chance that the Fed will indeed cut next month, per the CME FedWatch tool.