Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
U.S. stock markets, including the S&P 500, Nasdaq, and Dow Jones, recorded their first weekly loss in four weeks on Friday, November 7, 2025, driven by cautious reactions to corporate earnings and concerns over artificial intelligence. Concurrently, Bitcoin plummeted to approximately $107,000 amid a cautious stance from the Federal Reserve regarding future interest rate cuts, dampening optimism across financial markets.
U.S. Stock Markets Experience Weekly Decline
The S&P 500 declined 0.5 percent in early trading, while the Dow Jones Industrial Average fell 174 points, or 0.4 percent, and the Nasdaq composite dropped 0.8 percent. Wall Street’s “fear gauge,” the CBOE Volatility Index, reached its highest level in over two weeks, signaling increased investor apprehension.
Quarterly reports from U.S. companies influenced market movements, with payments firm Block sinking after its results fell short of forecasts. In contrast, exercise equipment maker Peloton saw its shares jump after beating estimates. Rising Treasury yields in the bond market also contributed to the downward pressure.
Sam Stovall, chief investment strategist at CFRA Research, attributed the market weakness to “traditional early November weakness triggered by elevated valuations and the running out of catalysts to support or propel the market.” Optimism surrounding artificial intelligence, which previously propelled markets to record highs, has been tempered by concerns about the technology’s monetization and circular spending within the industry.
Technology stocks, particularly in the semiconductor sector, experienced significant declines. Nvidia shares fell 2.8 percent and Broadcom stocks dropped 2.2 percent, positioning the information technology sector and the broader semiconductor index for their largest weekly losses in seven months. Tesla shares also fell 3.3 percent, impacting the consumer discretionary sector, despite shareholders approving CEO Elon Musk’s historic pay package.
The airline industry faced headwinds, with the Federal Aviation Administration (FAA) announcing a 10 percent reduction in air traffic across 40 “high-volume” markets starting Friday due to critical staffing problems. American Airlines, Delta Air Lines, and United Airlines saw their shares fall by 2 percent, 1.2 percent, and 1 percent, respectively.
In other market dealings early Friday, U.S. benchmark crude oil gained 66 cents to USD 60.09 per barrel, and Brent crude added 65 cents to USD 64.03 per barrel. The U.S. dollar strengthened against the Japanese yen, rising to 153.48 yen from 153.06 yen, while the euro declined to USD 1.1537 from USD 1.1546.
Bitcoin Plummets Amid Federal Reserve Caution
Bitcoin, the world’s largest cryptocurrency, has struggled to maintain key support levels, sparking concern among traders and investors as market sentiment turned sharply negative. Analysts warn that if sentiment does not improve soon, prices could potentially fall as low as $88,000 in the coming days.
The primary catalyst for Bitcoin’s recent slide was the Federal Reserve’s cautious stance following its latest interest rate decision. While the Fed reduced rates last week and signaled plans to end quantitative tightening by December, Fed Chair Jerome Powell emphasized that another rate cut in December was not guaranteed, quickly curbing optimism across financial markets.
Data from the CME FedWatch Tool indicates that the probability of a December rate cut dropped from 90 percent to 63 percent, with chances for January falling to 19.5 percent. This shift in expectations prompted widespread selling across risk assets, including cryptocurrencies.
Adding to the market unease, the Crypto Fear and Greed Index remains in the “fear” zone at 35. Institutional investors also demonstrated a pullback, withdrawing nearly $800 million from Bitcoin and Ethereum exchange-traded funds (ETFs) last week.
Long-term investors have contributed to Bitcoin’s decline by taking profits, with data from Coinglass showing over 100,000 BTC sold in October. This marked a rare setback for the cryptocurrency, which typically experiences a strong “Uptober” performance, with Bitcoin slipping 3.7 percent for the month.
Global economic tensions, including ongoing trade disputes between the U.S. and China, uncertainty surrounding oil prices, and geopolitical risks, have further driven many investors towards safer assets such as the U.S. dollar and gold.
According to Coinglass, 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. A sustained break below this level often triggers capitulation, where investors sell at a loss, deepening the decline. However, analysts suggest that if Bitcoin can close and hold above $113,000, it could invalidate the bearish outlook and open the door for a short-term rebound.
For November 2025, Bitcoin could see sideways trading between $107,500 and $123,000, with market uncertainty over U.S. economic data and a potential government shutdown potentially keeping volatility high. Still, some analysts believe a “Santa Rally” could emerge in December if the Fed follows through with its plans to end quantitative tightening and possibly cut rates again, which could bring back some liquidity and optimism to the crypto market.
Further indicating weak U.S. retail sentiment, Bitcoin’s price premium on Coinbase turned negative in late October and early November, trading at a discount for four consecutive days. A negative premium suggests reduced U.S. buying interest, increased selling pressure, and greater risk aversion among retail investors, coinciding with capital outflows from U.S.-listed Bitcoin ETFs.
Market Outlook
Both the traditional stock market and the cryptocurrency market are currently navigating a period of heightened investor caution, influenced by central bank policy signals, corporate performance, and broader macroeconomic uncertainties.
