US tech rout shifts trader focus from inflation to growth

A deepening tech stock rout is shifting trader focus from inflation to growth concerns, reducing market bets on December interest rate hikes by the U.S. Federal Reserve and European Central Bank. The selloff follows the Nasdaq's worst day since April 2025. The decline, wiping out trillions in value, came after U.S. Democrats swept midterm elections, raising fears of stricter AI regulation and data centre curbs. Tighter financial conditions and potential consumer wealth losses could slow growth, limiting central bank scope for hikes despite an Iran war-induced energy price surge. Markets now price roughly a 70% chance of a Fed hike and 60% for the ECB, down from over 80% and 75% last week. Analysts caution it is unclear if this is a correction or a deeper downturn, though the IMF warns a steep AI investment drop could cut global GDP by 1.1% by 2028.