US stocks fall after Fed pushback as Meta tumbles 11%

Bond yields rose alongside the dollar as money markets reined in their expectations for policy easing. Bitcoin sank.

Wall Street pumped the brakes on a furious stock rally after the Federal Reserve tempered expectations for a December rate cut and Meta Platforms Inc. tumbled 11% as the giant is taking on debt to fund its artificial-intelligence push.

Equities fell after notching a series of records in October, with the S&P 500 still set for its longest streak of monthly gains in four years. While the US and China agreed to a one-year trade truce, several investors saw the deal as mostly priced in. Bond yields rose alongside the dollar as money markets reined in their expectations for policy easing. Bitcoin sank.

The latest developments gave some reasons for the stock-market surge to take a breather after multiple warnings about high valuations and a narrowing of participation in recent days, with the cohort of big techs significantly outperforming other groups.

The AI trade is so essential to the bull market that any underwhelming updates on spending and progress developing the technology could quickly sway traders one way or the other.

“None of this means that the AI bubble is going to burst and that we’re on the cusp of a major reversal in the stock market,” said Matt Maley at Miller Tabak. “However, it does raise the odds that we could see a short-term pullback at some point soon.”

The S&P 500 fell about 0.5%. A gauge of tech megacaps lost 1.8%. The yield on 10-year Treasuries rose three basis points to 4.11%.