The week of November 3-7, 2025, presented a striking paradox for financial markets. The period began with euphoria surrounding major artificial intelligence infrastructure deals and robust corporate earnings, but by midweek, sentiment shifted dramatically as investors reassessed the sustainability of valuations that had reached unprecedented levels. The Amazon-OpenAI partnership initially energized markets, yet within days, concerns about overextended AI valuations triggered a significant correction that reverberated across global equities, cryptocurrencies, and commodities. This week underscored the market's sensitivity to valuation metrics and the growing debate about whether the artificial intelligence boom represents genuine economic value or speculative excess.
Market Indices: The week witnessed extreme volatility in major benchmarks. The S&P 500 (SPY) opened with gains on November 3 as the Amazon-OpenAI deal buoyed sentiment, but subsequently posted its largest loss in weeks with a 1.1% decline as valuations came under scrutiny. The Nasdaq Composite (QQQ) initially gained 0.5% on November 3 before tumbling more than 2% on November 4 amid broad-based selling pressure in technology stocks. By week's end, the Nasdaq had declined approximately 4.5% for the week, its worst performance since April when President Trump's "Liberation Day" tariff policies triggered a global market correction. The Dow Jones (DIA) displayed relative resilience, declining less sharply than the tech-heavy indices, closing down 0.48% on November 3 but experiencing weakness as the week progressed.
Sector Performance: The artificial intelligence and semiconductor sectors bore the brunt of the correction. Nvidia (NVDA), which briefly achieved a $5 trillion market capitalization earlier in the week, experienced a historic decline of approximately $450 billion over three trading days, representing a 16% plunge from its Monday close. The company's shares fell sharply after months of record gains, driven by concerns surrounding U.S.-China export restrictions on advanced semiconductors, potential production delays for the upcoming Blackwell GPU series, and mounting questions about whether valuations had become excessive relative to near-term earnings growth. Other semiconductor giants faced similar pressures, with AMD (AMD) declining 5% to 6% despite delivering record quarterly revenue, Broadcom falling substantially, and Super Micro Computer plummeting 25%, representing the poorest performer in the S&P 500 for the week.
Energy stocks drew support from oil market dynamics. Chevron (CVX) and Exxon (XOM) benefited from crude oil volatility, while Lockheed Martin (LMT) and Northrop Grumman (NOC) displayed relative strength amid geopolitical considerations.
Corporate Highlights:
Gold (GLD): Gold prices drifted below the psychologically important $3,950 level as the week progressed, entering a consolidation phase after prior rallies. Prices traded around $3,930-$3,950 per ounce, reflecting a balance between safe-haven demand and a slightly stronger U.S. dollar. The precious metal had reached approximately $4,378 per ounce in September before entering a correction, with the decline partly attributable to reduced expectations for additional Federal Reserve rate cuts. Federal Reserve Chairman Jerome Powell cooled market enthusiasm for December rate cuts, citing internal disagreements and limited economic data availability due to the government shutdown. Despite the recent weakness, gold maintained approximately 50% year-to-date gains, reflecting sustained investor interest in defensive instruments.
Oil: Crude oil prices reflected mixed sentiment during the week, influenced by global economic concerns balanced against geopolitical considerations. Brent crude futures (BNO) fluctuated as market participants assessed weakening demand signals amid broader economic uncertainty, partially offset by traditional risk premium considerations.
Bitcoin (BTC.X): The largest cryptocurrency experienced significant downward pressure throughout the week, plunging below the critical $100,000 psychological support level for the first time since late June. Bitcoin traded as low as $99,900 during the week before recovering slightly to approximately $100,110 by week's end. Over the past 24 hours, Bitcoin declined 2.9%, while the weekly loss approached 8.9%. The cryptocurrency's struggle reflected broader risk-off sentiment as institutional and retail investors retreated from high-beta assets amid concerns about stretched valuations and reduced market liquidity linked to the ongoing U.S. government shutdown. According to trading analysis, the next key support level sits at $98,000. Spot Bitcoin ETFs recorded inflows for the first time in eight days, suggesting some institutional interest at depressed prices. The crypto fear and greed index stood at 24, reflecting extreme fear conditions.
Ethereum (ETH.X): The second-largest cryptocurrency by market capitalization experienced even steeper declines than Bitcoin, falling approximately 4.6% over the past day and 15.7% over the week. Ethereum traded around the $3,200 level by week's end, retreating significantly from prior levels as investors rotated out of risk assets. Almost all top-10 cryptocurrencies by market capitalization declined during the week, with the exception of the memecoin Dogecoin, which managed a modest 0.3% gain. Broader liquidations in the crypto markets totaled $674.3 million over 24 hours, with $76.8 million liquidated in a single hourly period.
EUR/USD: The euro pair experienced significant weakness during the week, reflecting broader market dynamics. EUR/USD bounced off the 200-day moving average but remained under pressure as investors reassessed the growth outlook for the eurozone amid deteriorating economic data. The pair traded in a consolidation range, with the 200-day moving average providing technical support below current prices. Analyst perspectives from major institutions remained cautious, with JP Morgan projecting EUR/USD at 1.20 by year-end 2025, UBS expecting a rise toward 1.26 in 2026, and Morgan Stanley targeting 1.26 by June 2026. However, near-term technicals remained challenged, with momentum indicators pointing toward continued downside pressure.
Private Payrolls: The ADP National Employment Report revealed that private sector employment increased by 42,000 jobs in October, the first monthly gain since July. However, ADP's chief economist Dr. Nela Richardson characterized the hiring as "modest relative to what we reported earlier this year," noting that pay growth had remained "largely flat for more than a year." The slowdown in hiring, combined with weak wage pressures, suggests balanced supply and demand in labor markets. Notably, weakness appeared concentrated in professional business services, information technology, and leisure hospitality sectors, which posted job losses for the third consecutive month. This tepid employment picture contributed to broader economic concerns that weighed on equity markets as the week progressed.
Consumer Sentiment: The University of Michigan's consumer sentiment index fell to a nearly 3.5-year low in early November, exceeding analyst expectations for weakness. The precipitous decline reflected mounting consumer concerns about the extended government shutdown, which had surpassed one month, and its potential negative economic consequences. This deterioration in consumer psychology represented another headwind for equity valuations.
China Trade Data: Chinese exports declined 1.1% year-over-year in October, marking a significant disappointment against expectations of 2.9% growth and representing the largest decline in eight months. Imports rose only 1.0% year-over-year versus expectations of 2.7%, indicating softening demand both domestically and internationally. This weakness in China's trade data raised concerns about global growth prospects and contributed to risk-off sentiment.
Throughout the week, numerous Wall Street executives issued cautionary statements about market valuations. Nvidia CEO Jensen Huang stirred additional concerns by indicating that China was likely to "win the AI race" in technology development, later clarifying he meant China would advance rapidly in AI capabilities. These comments, combined with Palantir CEO Alex Karp's defense of elevated valuations against short-seller criticism, highlighted the emerging debate about whether AI enthusiasm had outpaced fundamental economic realities.
The Federal Reserve's increasingly hawkish messaging also contributed to market weakness. Vice Chair Philip Jefferson stated that interest rates continue to have a "somewhat restrictive" effect on the economy and that "it makes sense to proceed slowly with rate cuts as we approach the neutral rate." This commentary effectively reduced expectations for near-term rate relief and supported a stronger dollar, pressuring risk assets.
As markets head into the following week, investors will focus on several critical developments:
The week's events have demonstrated that despite the extraordinary rally in artificial intelligence-related equities throughout 2025, valuation considerations can quickly reassert dominance over sentiment. Markets appear to be entering a more discriminating phase where earnings quality, forward guidance, and valuation multiples command heightened scrutiny. The dramatic $1 trillion-plus decline in market capitalization across AI-related stocks within a few days serves as a reminder that momentum-driven rallies eventually confront valuation reality, and even extraordinarily successful companies are not immune to correction cycles.