Finance

Tech Stocks Tumble as Bitcoin Slips: How to Navigate the Shifting Market Landscape

Tech shares pulled back, and Bitcoin dropped due to Fed caution, but the Dow rose as investors shifted to value stocks.

November 11, 2025, 12:58 PM

Depressed stock trader in a suit with hands raised in frustration, surrounded by multiple monitors displaying negative financial data.

A professional broker showing negative emotions and stress after receiving bad news from the financial market. By Gorodenkoff / Shutterstock.com.

Executive Summary

U.S. equities closed mixed, with the S&P 500 and Nasdaq declining due to a sharp pullback in technology shares over AI valuation concerns, while the Dow Jones Industrial Average gained from a rotation into value stocks.

Bitcoin dropped to approximately $107,000, primarily triggered by the Federal Reserve’s cautious stance on interest rates and reduced odds of a December rate cut, alongside profit-taking by long-term investors.

Market participants are monitoring the House vote on the government shutdown bill, upcoming inflation data, and Federal Reserve commentary, with volatility expected to persist as the AI trade cools and investors rotate into cyclical sectors.

The Story So Far

U.S. equities are experiencing mixed performance primarily due to investors reassessing valuations in the overheated AI tech sector amid disappointing earnings and rising capital expenditures, leading to a rotation out of some growth stocks. Concurrently, Bitcoin is under significant pressure following the Federal Reserve’s cautious comments on future interest rate cuts, which has dampened overall market optimism for risk assets. These factors are compounded by a slowdown in the U.S. labor market and broader global economic tensions, fostering a cautious investment environment.

Why This Matters

The cooling enthusiasm for high-growth tech, particularly in the AI sector, suggests a potential rotation of investment towards value stocks as investors reassess valuations and capital spending priorities. Simultaneously, the Federal Reserve’s cautious stance on interest rates is dampening optimism across financial markets, exerting significant downward pressure on risk assets like Bitcoin and potentially limiting broader market upside. While the impending resolution of the government shutdown removes one immediate economic risk, persistent concerns about a slowing labor market indicate continued economic uncertainty and potential market volatility ahead.

Who Thinks What?

Investors and traders are growing wary of overvalued technology firms and rising capital spending in AI, leading to a reassessment of valuations and a rotation out of the overheated tech sector.

Federal Reserve Chair Jerome Powell and the Fed maintain a cautious stance on interest rates, signaling that a December rate cut is not guaranteed, which has dampened optimism and triggered selling pressure on risk assets like Bitcoin.

Market strategists and participants view the U.S. Senate’s passage of the government shutdown bill as a positive development that removes a key economic risk and restores the flow of federal data, partially buoying overall market sentiment.

U.S. equities closed mixed on Tuesday, November 11, 2025, with the S&P 500 declining 0.3% and the Nasdaq Composite falling 0.6%, primarily due to a sharp pullback in technology shares. The Dow Jones Industrial Average, however, gained 85 points, or 0.2%, as investors rotated into value stocks. Meanwhile, Bitcoin experienced significant pressure, dropping to around $107,000 by November 9, 2025, driven by the Federal Reserve’s cautious stance on interest rates.

U.S. Stock Market Performance

The tech sector’s downturn on Tuesday was exacerbated by disappointing earnings guidance from CoreWeave, which saw its shares plunge 11%. Nvidia also fell 3% after SoftBank sold its entire $5.83 billion stake, comprising 32.1 million shares, in the AI chipmaker. The Technology Select Sector SPDR Fund (XLK), which tracks S&P 500 tech stocks, lost nearly 1% as traders reassessed valuations in the overheated AI space.

Investors are growing wary of overvalued tech firms and rising capital spending, particularly in artificial intelligence infrastructure. Companies such as DoorDash, Duolingo, and Roblox recently experienced double-digit declines after signaling heavier investments in AI. Mark Mahaney of Evercore ISI noted that firms prioritizing spending over profits often face short-term market punishment.

Fresh economic data added to the cautious mood, with the ADP report indicating a slowdown in the U.S. labor market. Private sector job creation declined by more than 11,000 per week for the four weeks ending October 25. Chief Economist Nela Richardson commented that the data suggests the labor market “struggled to produce jobs consistently” through late October.

Sentiment was partially buoyed by the U.S. Senate’s passage of a bill late Monday to reopen the government, sending it to the House for approval. The legislation funds operations through January 2026, reverses all shutdown-related layoffs, and ensures federal workers receive back pay. Sonu Varghese, global macro strategist at Carson Group, stated that ending the shutdown removes a key economic risk and restores the flow of federal data critical for the Federal Reserve’s December meeting.

In other significant stock movements, Paramount Skydance jumped 5.7% after reporting strong earnings and announcing plans to cut costs and raise streaming prices next year. Conversely, Rigetti Computing dropped 5% after its third-quarter revenue of $1.9 million missed analyst estimates of $2.2 million.

Bitcoin Under Pressure

Bitcoin’s price decline to around $107,000 was primarily triggered by the Federal Reserve’s cautious comments following its latest interest rate decision. Fed Chair Jerome Powell’s emphasis that another rate cut in December was not guaranteed quickly dampened optimism across financial markets.

Data from the CME FedWatch Tool showed the odds of a December rate cut dropped from 90% to 63%, leading to widespread selling across risk assets. The Crypto Fear and Greed Index remained in the “fear” zone at 35, reflecting persistent caution among traders. Institutional investors also appeared to pull back, with nearly $800 million withdrawn from Bitcoin and Ethereum ETFs last week.

The cryptocurrency’s decline was intensified by long-term investors taking profits, with data from Coinglass showing over 100,000 BTC sold in October. This caused Bitcoin to slip 3.7% for the month, breaking its seven-year “Uptober” bullish streak. Global economic tensions, including U.S.-China trade disputes and geopolitical risks, also contributed to investors moving towards safer assets like the U.S. dollar and gold.

Analysts suggest Bitcoin risks falling to $88,000 if it fails to hold above the $113,000 resistance level, which represents the cost basis for short-term holders. The $88,000 mark aligns with Bitcoin’s realized price, historically a strong support during corrections. However, a sustained close above $113,000 could invalidate the bearish outlook and open the door for a short-term rebound.

Adding to the bearish sentiment, Bitcoin’s price premium on Coinbase, a key indicator of U.S. retail sentiment, turned negative in late October and early November. This negative premium, the longest streak since mid-August, suggests reduced U.S. buying interest and increased selling pressure among retail investors.

Market Outlook

Looking ahead, market participants will monitor the House vote on the shutdown bill, upcoming inflation data, and Federal Reserve commentary. While the AI trade shows signs of cooling, prompting rotation into cyclical sectors, volatility could persist if labor data weakens or the Fed adopts a hawkish stance. Bitcoin’s trajectory will hinge on overcoming key resistance levels and shifts in broader economic sentiment.