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Tech stocks dragged Wall Street down as Nvidia faced an antitrust probe in China, and AMD was hit with a ratings downgrade, just as investors eye key US inflation data.

What does this mean?

Clouds gathered over tech firms, leading to a Wall Street slump after Nvidia's shares dropped due to a Chinese antitrust investigation. The information technology sector took another hit as BofA Global Research downgraded Advanced Micro Devices. The S&P 500 and Nasdaq Composite each fell around 0.6%, with the Dow close behind at 0.51%. The market's overall mood was mixed: Comcast predicted losing over 100,000 broadband users, impacting its shares, while Hershey gained despite Mondelez seeing a slip amid acquisition chatter. All eyes are now on Consumer and Producer Price Index releases. Prospects for a Federal Reserve rate cut are rising after unemployment hit 4.2% in November, although Fed Chair Powell remains cautious, emphasizing economic robustness before major policy changes.

Tech sector woes highlight market volatility, with Nvidia's plight underlining regulatory risks in crucial areas like China. AMD's downgrade shows investor sensitivity to analyst insights, urging vigilance. As inflation expectations and Fed policy communications evolve, sectors linked to consumer tech should prepare for potential changes.

The bigger picture: Inflation and interest rates hang in the balance.

Inflation data is pivotal, with investors focused on potential impacts on Federal Reserve actions. With an 85% likelihood of a rate cut, market dynamics could shift, affecting consumer spending and investment plans. Given global economic interconnections, these US developments might influence international markets and trade.