Wall Street closed lower, led by a sharp drop in Nvidia shares and heavy-weights in artificial intelligence (AI).
All three major US stock indexes recorded their biggest daily percentage drops in more than a month.
Stock markets that had previously performed well in recent years came under pressure as investors worried about soaring valuations driven by optimism about AI.
Nvidia shares fell 3.6%, Tesla fell 6.6% and Broadcom fell 4.3%.
The S&P 500 index fell 1.66% to 6,737.49 points, the Dow Jones fell 1.65% to 47,457.22 points, while the technology-focused Nasdaq plunged 2.29% to 22,870.36 points.
In other news, the US government reopened after US President Donald Trump signed a funding bill approved by the House of Representatives on Wednesday.
The longest government shutdown in the country's history, lasting 43 days, has ended investor concerns and disrupted the release of new economic data.
Investors are now reducing expectations for interest rate cuts due to concerns about inflation, as well as differences in views among central banks on the state of the US economy.
Several Federal Reserve (Fed) policymakers have expressed doubts about the next interest rate cut, causing market expectations for a reduction in borrowing costs in December to shrink to near zero.
Fed officials who made recent statements referred to concerns about inflation and signs of relative stability in the labor market after two interest rate cuts this year.
Meanwhile, ADP data showed that private employers shed more than 11,000 jobs per week through the end of October.
The Indeed Hiring Lab report also recorded a 16% decline in retail job postings, indicating continued weakness in the labor market.
According to CME Group's FedWatch tool, traders now expect a chance of about 47% for a 25 basis point interest rate cut in December, down from 70% last week.
