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Indexes down: Dow 1.24%, S&P 500 1.09%, Nasdaq 1.44%

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Applied Materials ( AMAT ) falls after reduced China spending

forecast

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Cidara Therapeutics ( CDTX ) soars on Merck's ( MRK ) buyout deal

(Updates for market open)

By Twesha Dikshit and Purvi Agarwal

Nov 14 (Reuters) -

Wall Street's main indexes dropped on Friday, as technology

stocks came under renewed selling pressure, while hawkish

comments from Federal Reserve officials deepened doubts about an

interest rate cut in December.

Worries about stretched AI stock valuations have led to

several bouts of selloff in recent weeks and put the Nasdaq on

course for its fifth session of declines, the index's longest

losing streak since April. It was also poised for a second

consecutive week of losses.

"People have seen the over valuation story, it has been

there for a while, but they are finally acting on it ...

momentum trade is starting to unwind," said Joe Saluzzi, partner

and co-founder at Themis Trading.

"When it does go down like you're seeing this morning,

they're going to take them all out. There's no safety trade

there."

Applied Materials ( AMAT ) shares dropped 6.3% to the

bottom of the S&P 500 after the company flagged expectations of

weaker China spending next year on tighter U.S. export control

curbs. Most semiconductor-linked stocks fell and the broader

index shed 3%.

Megacap technology stocks were lower, with the Roundhill

Magnificent Seven ETF down 2%. Information technology

stocks on the S&P 500 also lost 2%.

The three major U.S. stock indexes posted their steepest

one-day declines in over a month in the previous session.

At 9:36 a.m. ET, the Dow Jones Industrial Average

fell 568.05 points, or 1.24%, to 46,889.17, the S&P 500

lost 73.29 points, or 1.09%, to 6,664.20 and the Nasdaq

Composite lost 317.39 points, or 1.44%, to 22,552.96.

The CBOE Volatility Index, Wall Street's fear

gauge, touched a one-week high earlier and was last up 3 points

at 23.

Meanwhile, a growing number of Fed policymakers

signaled reticence on further easing. St. Louis President

Alberto Musalem urged caution, while Cleveland's head, Beth

Hammack, said restrictive policy would help tackle inflation.

Minneapolis' Neel Kashkari on Thursday told Bloomberg News he

had been against October's rate cut.

Expectations for a 25 point rate cut in December fell to

53% from last week's 67%, according to CME Group's FedWatch

tool.

Investors will parse through a fresh set of commentary from

Fed officials through the day.

The historic U.S. government shutdown, which ended on

Thursday, led to an economic data drought, leaving the Fed and

traders flying blind and rekindled concerns about the health of

the labor market and the inflation outlook.

Despite the reopening, data gaps are likely to be permanent

with the White House casting doubt on some reports for October

ever being released.

On the trade front, the Swiss government said that U.S.

tariffs on Swiss goods will be reduced to 15% from 39%.

Among others, Walmart ( WMT ) fell 2.2% after announcing

that CEO Doug McMillon would retire next year.

Warner Bros Discovery ( WBD ) gained 2.4%. The entertainment

company said it had amended CEO David Zaslav's employment

agreement amid a strategic review of its business.

Cidara Therapeutics ( CDTX ) more than doubled after Merck ( MRK )

said it will acquire the company in a nearly $9.2

billion deal.

Declining issues outnumbered advancers by a 2.86-to-1

ratio on the NYSE and by a 3.8-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and six new

lows, while the Nasdaq Composite recorded 8 new highs and 186

new lows.