U.S. Markets Slide After Sharp Selloff: Key Trends for Investors
Introduction
Following the worst day for equities in over a month, U.S. futures continued to dip on Friday. A blend of factors is fueling investor caution: renewed concerns over tech sector valuations, new data on jobless claims, and ongoing uncertainty about Federal Reserve policy. Major stocks like Nvidia and Broadcom were among those leading the market downturn, with Oracle's recent losses highlighting the volatility in growth-driven sectors.
Market Performance
At 07:49 GMT, futures linked to the major U.S. indexes were all trading lower.
Dow futures fell by 69 points (-0.2%)
S&P 500 futures dropped by 17 points (-0.3%)
Nasdaq 100 futures declined by 104 points (-0.4%)
The pressure on markets follows a fleeting boost earlier in the week when the U.S. government shutdown ended. Now, investors are re-evaluating risk, especially in technology and AI-focused stocks.
Tech Stocks Under Scrutiny
Technology shares are facing renewed skepticism amid concerns that valuations may have risen too far, too fast.
Nvidia and Broadcom experienced significant declines.
Oracle has lost more than a third of its value since a peak in September.
Analysts suggest “continued carnage in tech” is causing some investors to abandon hopes of a year-end rally.
Federal Reserve Uncertainty
The upcoming December monetary policy meeting of the Federal Reserve adds another layer of uncertainty.
The recent government shutdown resulted in a lack of reliable economic data, making the Fed’s next steps less predictable.
Market participants are divided on whether the Fed will cut interest rates again, as delayed jobs figures may not provide enough clarity.
Applied Materials: China Export Warning
Shares of Applied Materials declined after the company signaled weaker demand for chipmaking equipment in China, pressured by expanded U.S. export controls.
Around $110 million worth of goods went undelivered in the latest quarter due to these restrictions.
The company said its 2026 revenue could take a $600 million hit from stricter export rules.
Despite the setback, Applied Materials expects growing business demand in AI to drive stronger semiconductor equipment sales later next year.
Labor Market Developments
Applications for U.S. jobless benefits dipped last week, but the change wasn't substantial enough to sway Fed policy.
First-time claims for state unemployment benefits stood at about 227,543 for the week ending November 8.
Data releases have been disrupted by the government shutdown, making labor market trends harder to interpret.
Bitcoin and Macro Trends
Bitcoin dropped below $100,000 for the first time in weeks, echoing a broader retreat from risk assets as market sentiment cooled.
The cryptocurrency slid 6.5% to $96,968.6 and is on track for its third consecutive week of losses.
Investor flows into Bitcoin from major funds and institutions are waning as market volatility rises.
China Factory Output Misses Expectations
China’s industrial output rose 4.9% year-on-year in October, falling short of the expected 5.5%.
Retail sales increased by a modest 2.9%, but domestic demand remains subdued.
Persistent deflation at the factory gate and ongoing trade tensions with the U.S. continue to weigh on Chinese producers.
Key Takeaways
U.S. stock futures point to continued market weakness following tech-led declines.
Tech stocks and AI-driven companies face skepticism over high valuations.
The Fed’s next move is unclear due to patchy economic data post-shutdown.
Export controls are hitting U.S. chip equipment makers, especially those with China exposure.
Bitcoin is under pressure as broader risk appetite shrinks.
Weak Chinese factory output signals continued uncertainty in the global economy.
Sources
Sources: