The Dow Jones Industrial Average plummeted nearly 800 points on Thursday as investors expressed growing concern over AI-related expenditures within the tech industry, coupled with fading hopes for an interest-rate cut next month.

In an abrupt downturn, the Dow tumbled 798 points, or 1.7%, marking its most significant decline in over a month. This sharp drop followed a record high achieved just a day earlier. Meanwhile, the S&P 500 decreased by 1.9%, heavily influenced by Disney’s 8% stock drop after the company reported less-than-expected revenue.

The Nasdaq, known for its tech focus, fell by 2.3% as apprehensions resurfaced over the potential overvaluation of AI-related stocks, exacerbating a sell-off that began the previous week.

Despite a strong start on Thursday, investor confidence quickly waned, particularly in companies investing heavily in expensive, energy-intensive data centers.

The so-called “Magnificent Seven” tech giants, who have committed billions to AI initiatives, faced significant setbacks. Notably, shares of Nvidia, Broadcom, and Tesla declined by 3.6%, 4.3%, and 6.6%, respectively.

Alphabet and Amazon each fell about 3%. Shares in Microsoft dipped 1.6% while Meta traded roughly flat.

Meanwhile, the US government reopened on Thursday after its longest-ever shutdown. 

“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,” Carol Schleif, chief market strategist at BMO Private Wealth, said in a note Thursday.

She noted that monthly jobs and inflation data – which was almost entirely put on pause during the 43-day shutdown – is “so vital for interest rate expectations.”

National Economic Council Director Kevin Hassett said Thursday that the October jobs report will be released after a delay, though it will not include the unemployment rate.

Investors worried that the lack of data could prevent the Fed from slashing interest rates during its Dec. 10 meeting, since officials have been flying blind on guidance without government data.

The odds of a quarter-point cut plunged to 51.9% on Thursday – a more than 10% drop from the previous day, according to CME FedWatch.

White House press secretary Karoline Leavitt said Wednesday that October inflation and jobs reports may never be released, adding that the government shutdown could hit fourth-quarter GDP by as much as 2 percentage points.

“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,” Schleif said.

“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.”