Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
U.S. stock markets experienced declines on Tuesday, November 4, 2025, as investors raised concerns over elevated tech valuations, while Bitcoin’s price fell amid a cautious stance from the Federal Reserve. The Nasdaq Composite led the stock market downturn, falling 0.9%, with the S&P 500 dropping 0.6% and the Dow Jones Industrial Average slipping 0.2%. Simultaneously, Bitcoin struggled to maintain key support levels, trading around $107,000, influenced by reduced expectations for further interest rate cuts and broader global economic uncertainties.
U.S. Stock Market Declines Amid Valuation Concerns
Wall Street’s anxiety stemmed from a questioning of whether current corporate profits adequately justify “sky-high” stock valuations, particularly within the technology sector. This skepticism followed a period where AI-linked companies had propelled the Nasdaq and S&P 500 to near-record levels, a rally that analysts now suggest may be at risk.
Key Stock Movements
Several prominent stocks contributed to the market’s decline. Palantir shares tumbled over 7% despite reporting strong third-quarter earnings and raising its full-year revenue outlook to $4.4 billion. Analysts cited the company’s lofty price-to-earnings multiple and sustainability concerns as drivers for the sell-off.
Tesla also saw its shares fall over 3% after Norway’s sovereign wealth fund, a significant shareholder, announced plans to vote against CEO Elon Musk’s proposed $1 trillion pay package. Industrial giant Caterpillar dropped almost 3.8%, even as it boosted its long-term growth targets, forecasting sales and revenue growth between 5% and 7% through 2030 and increased operating profit margin targets.
Influential Market Bets and Geopolitical Factors
Adding to market caution, hedge fund manager Michael Burry’s Scion Asset Management disclosed new bearish bets against Nvidia and Palantir via put options. Burry, known for predicting the 2008 housing crash, anticipates a pullback in overheated AI stocks. Nvidia shares fell more than 2% after President Donald Trump announced that the U.S. would bar the sale of its top-tier chips to China, citing national security concerns.
On the commodities front, Russian crude oil exports decreased by 190,000 barrels per day over the four weeks ending November 2, impacted by fresh U.S. sanctions. This led to a drop in Brent crude by 1.2% to $64.23 and WTI by 1.3%. Major buyers like China, India, and Turkey have slowed purchases, with the Trump administration reportedly raising tariffs on Indian goods to 50% over its resale of Russian oil.
Further uncertainty was introduced by the U.S. government shutdown, which reached its 35th day, equalling the longest in American history. The prolonged closure is delaying critical economic data releases, including the week’s jobs report, complicating the Federal Reserve’s policy path and contributing to elevated volatility across sectors.
Bitcoin Price Drops Amid Federal Reserve Caution
Bitcoin’s price declined to approximately $107,000, driven primarily by the Federal Reserve’s cautious tone following its latest interest rate decision. Although the Fed recently reduced rates and signaled an end to quantitative tightening by December, Fed Chair Jerome Powell indicated that another rate cut in December was not guaranteed. This statement significantly dampened market optimism, with the odds of a December rate cut dropping from 90% to 63% according to the CME FedWatch Tool.
Market Sentiment and Investor Behavior
The Crypto Fear and Greed Index remained in the “fear” zone at 35, reflecting persistent caution among traders. Institutional investors also appeared to withdraw, with nearly $800 million pulled from Bitcoin and Ethereum ETFs last week. Long-term Bitcoin holders intensified the decline by selling over 100,000 BTC in October, breaking the cryptocurrency’s typical “Uptober” bullish streak.
Global economic tensions, including ongoing trade disputes between the U.S. and China, and geopolitical risks, have also pushed investors towards safer assets like the U.S. dollar and gold. Analysts are closely watching Bitcoin’s key price levels, with $113,000 identified as a resistance point and $88,000 as a potential support level, which aligns with the cryptocurrency’s realized price.
Outlook for November
With a lack of major catalysts, Bitcoin is projected to trade sideways between $107,500 and $123,000 through November. A negative Bitcoin price premium on Coinbase, observed in late October and early November, further indicated reduced U.S. buying interest and increased selling pressure among retail investors. Traders anticipate continued volatility, with a clear breakout or breakdown from these levels determining Bitcoin’s next major move.
