Wall Street’s main indexes dropped on Tuesday on concerns over lofty equity valuations and dimming prospects of an interest rate cut from the Federal Reserve, while investors awaited Nvidia’s earnings and key government data due later this week.

Most heavyweight tech stocks were under pressure, with Amazon.com, down 2.3%. Chip stocks, including Advanced Micro Devices and Intel, slipped 4.2% and 2.2%, respectively.

At 09:33 a.m. ET, the S&P 500 lost 17.41 points, or 0.26%, and the Dow Jones Industrial Average fell 374.48 points, or 0.80%, both hitting one-month lows. The Nasdaq Composite lost 75.40 points, or 0.33%.

Nvidia’s quarterly results, due after markets close on Wednesday, are seen as a litmus test for the AI-driven rally that has pushed markets to record highs this year. The AI chip giant’s shares were down 2.6%, extending Monday’s near 2% drop.

Alphabet CEO Sundar Pichai told the BBC in an interview on Tuesday that no company would be unscathed if the AI boom collapses.

Technology stocks were the worst hit, down 1.5%.

“We’re definitely seeing more jitters as we move into a late-cycle stage. Concerns are mounting around how capex is financed and, importantly, what the return on investment will look like,” said Johanna Kyrklund, group chief investment officer at Schroders.

“The weakness we’re seeing in stocks is really just a very limited selloff… valuations are expensive, but they can probably stay expensive for a while longer.”

The S&P 500 consumer discretionary index was down 1.6%, with Home Depot dropping 3.3% after the home improvement chain forecast a bigger drop in full-year profit. Rival Lowe’s also slid 1.3%.

Big-box retailers Walmart and Target are also set to report this week, with their results expected to provide insights into the health of the American consumer.

Concerns over high valuations and dwindling expectations of a December rate cut have led to a pullback in U.S. stocks, with the S&P 500 down more than 3% from its October peak.

The CBOE Volatility Index, Wall Street’s fear gauge, hit a one-month high.

Eyes on Data as Shutdown in Rear-View

The much-delayed September jobs report is set to be released on Thursday, but may do little more than confirm earlier private market surveys pointing to a cooling labor market.

The Labor Department data on Tuesday showed the number of Americans receiving unemployment benefits stood at a two-month high in mid-October for the week ended October 18.

Meanwhile, traders see a 50% chance of an interest rate cut from the Fed in December, down from a more than 93% chance recorded a month earlier, according to the CME FedWatch Tool.

Declining issues outnumbered advancers by a 2.07-to-1 ratio on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and 14 new lows, while the Nasdaq Composite recorded seven new highs and 162 new lows.

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(Reporting by Shashwat Chauhan and Twesha Dikshit in Bengaluru, additional reporting by Rashika Singh; Editing by Shilpi Majumdar and Krishna Chandra Eluri)