Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
U.S. stock markets experienced a significant downturn on Friday, November 6, 2025, as investor confidence waned amidst a tech sector sell-off and broader economic concerns. The Nasdaq Composite plunged 1.9%, the S&P 500 fell 1.1%, and the Dow Jones Industrial Average slipped 0.7%, driven by a sharp decline in growth stocks and a specific hit to Nvidia following reports of a U.S. ban on AI chip exports to China. Bitcoin also faced heavy pressure, dropping to around $107,000, as market sentiment turned negative due to the Federal Reserve’s cautious stance on interest rates.
Broad Market Declines
The broad-based sell-off saw the Nasdaq Composite sink to its 50-day moving average, while the S&P 500 tumbled 1.1% and the Russell 2000, tracking small-cap stocks, lost 1.3%. Market breadth turned negative, with more than twice as many Nasdaq stocks falling as rising, signaling deepening institutional selling pressure across Wall Street.
The Dow Jones Industrial Average saw a milder decline, cushioned by gains in Chevron, Coca-Cola, and Sherwin-Williams, each rising between 1.5% and 2%.
Tech Sector Under Pressure
Nvidia’s stock collapsed more than 4% after reports indicated the U.S. government would block the company from selling a scaled-down version of its Blackwell AI chip to China. This news reversed earlier hopes of export approval, which had been hinted at by President Donald Trump, and triggered fears of an AI slowdown before it truly began.
Other tech and AI-linked firms also faced significant selling pressure. Palantir extended its losing streak, sliding over 1% after breaching its 50-day line, while Robinhood and SoFi also dropped more than 1%. Tesla slipped 0.5% despite shareholders approving Elon Musk’s $1 trillion pay deal and his announcement of the new Tesla Roadster 2 debuting on April 1, 2026.
The Innovator IBD 50 ETF, which tracks top-performing growth stocks, plunged another 3%. AI-linked firms such as Sterling Infrastructure, Credo Technology, and Celestica dropped between 4% and 7%, signaling renewed weakness in high-growth tech.
Economic Data Worsens Mood
Economic data further dampened investor sentiment. The University of Michigan’s consumer sentiment index sank to 50.3, missing forecasts and reaching its lowest point in months. Concurrently, year-ahead inflation expectations ticked higher to 4.7%. Traders indicated that this data highlighted growing fears about consumer fatigue, aligning with the Federal Reserve’s warnings of “higher for longer” interest rates.
In commodities, WTI crude hovered near $59.65 a barrel, while gold climbed to $4,000 an ounce as investors sought safer assets. The 10-year Treasury yield remained flat at 4.09% after a sharp decline earlier in the week.
Earnings Drive Volatility
Individual stock movements were significantly influenced by earnings reports. Take-Two Interactive was the biggest loser on the Nasdaq 100, crashing nearly 9% after investors reacted negatively to the news that the highly anticipated “Grand Theft Auto 6” would not arrive until November 2026. In contrast, Expedia rocketed 17% to an all-time high after delivering strong earnings and upbeat forecasts.
Among other notable movers, Akamai Technologies jumped 11% on solid results, and Century Aluminum soared 14%. Conversely, Block plunged 15% on disappointing earnings, while Microchip Technology sank 6.5% and Bitcoin-linked MicroStrategy dropped 5.5%.
Bitcoin Under Heavy Pressure
Bitcoin’s price struggled to stay above key support levels, dropping to around $107,000. This decline was primarily attributed to the Federal Reserve’s cautious stance following its latest interest rate decision. While the Fed reduced rates last week, Fed Chair Jerome Powell emphasized that another cut in December was not guaranteed, dampening optimism across financial markets.
The Crypto Fear and Greed Index remained in the “fear” zone, reflecting persistent caution. Institutional investors also pulled back, with nearly $800 million withdrawn from Bitcoin and Ethereum ETFs last week. Long-term investors intensified Bitcoin’s decline by taking profits, selling over 100,000 BTC in October, which broke the cryptocurrency’s seven-year “Uptober” bullish streak.
Global economic tensions, including trade disputes between the U.S. and China, also contributed to investors moving towards safer assets like the U.S. dollar and gold. Analysts warn that 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. Conversely, a sustained close above $113,000 could invalidate the bearish outlook.
Adding to the bearish sentiment, Bitcoin’s price premium on Coinbase, an indicator of U.S. retail sentiment, turned negative in late October and early November, suggesting reduced U.S. buying interest and increased selling pressure.
Market Outlook
Analysts warned that heavy institutional selling across leading growth names is a red flag, with both the Nasdaq and S&P 500 breaking below their 21-day averages. The broader fear gripping Wall Street is whether the AI hype cycle is fading prematurely, with Nvidia’s export ban and heavy selling in AI-linked ETFs suggesting traders are questioning valuations built on AI optimism. For Bitcoin, November could see sideways trading, with a potential “Santa Rally” in December if the Fed’s quantitative tightening ends and further rate cuts materialize.
The recent market movements underscore a period of heightened investor caution, with both major stock indices and cryptocurrencies grappling with economic uncertainties, regulatory actions, and a reassessment of high-growth valuations.
