Wall Street continued its downward trend on Friday, with major indices sliding for a second consecutive day as investor anxiety mounted over the technology sector and the likelihood of a December Federal Reserve interest rate cut. The S&P 500 dropped 32 points, or 0.5%, in early trading, while the Dow Jones Industrial Average fell 467 points, or 1%. The tech-heavy Nasdaq Composite also declined, losing 0.7%. The sell-off followed one of the worst days for the stock market since April, as global financial markets reacted to growing concerns. In Europe, Britain’s FTSE 100 fell more than 1.1%, Germany’s DAX dropped 0.7%, and France’s CAC 40 slipped 0.4%. Analyst Adam Crisafulli of Vital Knowledge noted in a research note that while sentiment around AI stocks has turned negative this week, the underlying fundamentals of the sector remain strong. “There's a lot of emotion involved with AI, and people are getting spooked by the sloppy price action in prominent AI-linked stocks, but actual fundamentals in the industry remain very strong,” he said. The recent pullback in tech shares has been fueled in part by waning confidence in a rate cut by the Federal Reserve during its final meeting of the year on December 9–10. Although the Fed reduced interest rates in both September and October, some policymakers have signaled caution about another cut. Fed Chair Jerome Powell recently stated that a December rate reduction is not “a foregone conclusion.” As a result, the market now prices the chance of a rate cut in December at 53%, according to the CME FedWatch tool. This uncertainty has prompted investors to reassess their positions, particularly in high-growth tech and AI-related equities, which have been sensitive to shifts in interest rate expectations.