Wall Street closed sharply lower on Thursday as heavy losses in Nvidia and other major AI stocks pressured the market. Investor sentiment weakened after renewed inflation concerns and growing divisions among Federal Reserve officials raised doubts about the pace of future interest rate cuts. All three major U.S. indexes recorded their biggest single-day percentage declines in more than a month.

The selloff came as the U.S. government reopened following a record 43-day shutdown that had unsettled markets and delayed key economic data releases. Meanwhile, an increasing number of Fed policymakers have signaled caution toward additional rate cuts, citing persistent inflation pressures and signs of stability in the labor market after two rate reductions earlier this year. Market odds for a December rate cut have now fallen to nearly even.

“The fundamental question is whether tariff-driven inflation is temporary,” said Jake Dollarhide, CEO of Longbow Asset Management. “That uncertainty is why some Fed governors are hesitant to cut—it’s a risky bet either way.”

High-flying tech and AI names, which have powered much of the market’s gains in recent years, faced sharp declines as investors reassessed lofty valuations. Nvidia slid 3.6%, Tesla dropped 6.6%, and Broadcom fell 4.3%.

“There’s a lot of uncertainty about the economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “We’re seeing a correction in the AI sector and a broader rotation in the market.”

The S&P 500 fell 1.66% to 6,737.49, the Nasdaq dropped 2.29% to 22,870.36, and the Dow Jones Industrial Average declined 1.65% to 47,457.22. Nine of the 11 S&P 500 sectors ended lower, led by a 2.73% drop in consumer discretionary stocks followed by a 2.37% decline in technology.