Why Is the Stock Market Down Today? 7 Key Reasons Driving the Sell-Off

U.S. stocks opened lower on Monday, snapping last week’s record-setting rally as investors weighed fresh policy uncertainty, soaring gold prices and a busy week of economic data. Early trading saw the Dow Jones Industrial Average give up about 250 points, while the S&P 500 and Nasdaq Composite each slipped roughly 0.5%. Futures had already turned negative overnight after the White House announced a sweeping visa crackdown that could curb the hiring pipeline for tech and healthcare firms, adding a new layer of growth anxiety just as Wall Street questions how long post-rate-cut optimism can last. Key drivers behind the pullback • Profit-taking after record highs • Uncertainty over the Federal Reserve’s next move as officials hit the speaking circuit this week • Nervousness ahead of Thursday’s PCE inflation report, the Fed’s preferred gauge • Policy risk tied to the administration’s H-1B visa restrictions • A flight to safety that pushed gold to a fresh record above $3,750 an ounce, siphoning money from equities • Rising oil prices holding above $103 a barrel, fanning inflation fears Rate-path jitters Several Fed presidents are scheduled to speak over the next 48 hours, and traders worry that any hint of a “wait-and-see” stance could temper expectations for additional cuts into year-end. The yield on the 10-year Treasury ticked up to 4.33%, its highest in two weeks, tightening financial conditions just as corporate earnings estimates begin to flatten. Sector rotation and technical pressure High-growth software and semiconductor names that led September’s surge are bearing the brunt of the retreat, with the Philadelphia Semiconductor Index down more than 1% in early dealings. Conversely, defensive pockets such as utilities and consumer staples are edging higher, a classic late-cycle signal that underscores investor caution. What to watch next • Tuesday: August new-home-sales data could reveal how higher mortgage costs are impacting housing demand. • Wednesday: A trio of Fed speakers — Bowman, Bostic and Goolsbee — may offer clarity on policy timing. • Thursday: The August PCE report is forecast to show core prices up 0.2% month-over-month; a surprise to the upside could deepen today’s slide. • Friday: The final read of September consumer sentiment will gauge whether household inflation expectations are re-anchoring. Bottom line Today’s weakness looks less like the start of a full-blown correction and more like a “reset” after an unusually strong three-week run. Still, with valuations stretched and macro risks multiplying, the question “why is the stock market down today?” can’t be answered by a single catalyst. Instead, a cocktail of policy uncertainty, rate angst and tactical profit-taking is pressuring indices — a reminder that even in record territory, the road higher rarely travels in a straight line.