CNBC Daily Open: Flying blind in markets and the economy

U.S. markets had their worst day since Oct. 10. That marks a sharp reversal for the Dow Jones Industrial Average, which shed 1.65% to settle at 47,457.22, a day after it closed above 48,000 for the first time. Meanwhile, the S&P 500 lost 1.66% and the Nasdaq Composite tumbled 2.29%.

The slump in stocks can partly be traced to a turnaround in sentiment regarding artificial intelligence. Tech behemoths such as Nvidia, Broadcom and Oracle slumped, with the last losing more than one-third in value since it rocketed 36% in September.

Investors, it seems, are growing worried over the high valuations of tech names, as well as the gigantic amount of capital expenditure they are committing to — with some, like Oracle, having to take on debt to fulfil those obligations.

Uncertainty over an interest rate cut in December is also putting a downer on Wall Street. It’s a coin toss as to whether the U.S. Federal Reserve will ease monetary policy then, according to the CME FedWatch tool. That’s a huge difference from a month ago, when traders were pricing in a 95.5% chance of a December cut.

Not having October’s employment and inflation numbers, and possibly never getting them, means the Fed lacks visibility into the state of the economy — and whether it should try to support the labor market or continue reining in inflation.

After all, flying blind makes it hard to see where you’ll land. As of now, that applies both to the Fed and investors trying to navigate the still-hazy ambitions of tech companies.

U.S. stocks pull back on AI sell-off. All major U.S. indexes fell Thursday stateside dragged down by heavyweight technology names. Europe’s regional Stoxx 600 retreated 0.61%, with most bourses in the red.

A December rate cut doesn’t seem so certain. Alack of economic data because of the government shutdown — now ended — is complicating the Fed’s decision. Fed official Susan Collins on Wednesday said holding rates will “likely be appropriate.”

Elon Musk’s xAI is raising $15 billion. A large amount of money in this latest funding round will go toward graphic processing units, sources familiar with the matter told CNBC’s David Faber. Musk called the news “False” in a post on X.

China’s Singles’ Day sales stumble. The Double 11 shopping festival this year marked a 14.2% year-on-year growth in sales, according to Chinese consumer research firm Syntun, trailing last year’s 26.6% increase.

[PRO] Be wary of stocks with zero revenue. The year-to-date rally in stocks means some could be trading at elevated prices. CNBC Pro found a few names with market caps of at least $1 billion — but haven’t generated revenue over the last 12 months.