Tech Stocks Slide as AI Bubble Concerns Eclipse Government Shutdown Relief

Markets shrugged off the end of the longest U.S. government shutdown in history, with tech stocks leading Thursday's declines. The Nasdaq dropped over 2% as investor focus shifted from political resolution to growing skepticism about AI infrastructure spending and fading hopes for Fed rate cuts.

What began as a 'buy the rumor' rally Monday reversed sharply upon the shutdown's actual conclusion. The pattern suggests traders had priced in the resolution, leaving markets vulnerable to profit-taking. Beneath the surface, two critical market drivers show cracks: unchecked AI enthusiasm and shifting monetary policy expectations.

Federal workers' backpay and resumed economic data flows failed to offset sector-specific anxieties. The AI selloff reflects mounting concerns about unsustainable data center investments, while bond markets increasingly doubt the Fed will deliver expected December easing. Historically favorable seasonal trends are being overridden by these fundamental uncertainties.