Key Points
- Market Selloff Amid AI Concerns: The S&P 500, Nasdaq, and Dow Jones experienced significant declines throughout the week as AI bubble concerns resurged, despite Nvidia beating earnings expectations.
- Nvidia Strong Results Provide Brief Relief: Nvidia (SPY) reported record-breaking Q3 earnings with $57 billion in revenue (+62% YoY) and $31.9 billion in profit (+65% YoY), beating forecasts, but failed to sustain market momentum as AI investment sustainability doubts persisted.
- Bitcoin Crash to Multi-Month Lows: Bitcoin (BTC.X) plummeted to $82,605 by Friday, marking its worst monthly performance since the 2022 crypto crisis, wiping out all 2025 gains and declining over 30% from October highs amid liquidations and risk-off sentiment.
- Technical Breakdown in Equities: The S&P 500 broke below its 50-day moving average for the first time in 138 sessions, ending a 10-week streak of winning Mondays, while Nasdaq shed 2.2% and dipped below its 50-day moving average amid broad-based weakness.
- Employment Data and Fed Uncertainty: The September jobs report showed 119,000 positions added, with unemployment rising to 4.4%, while Fed minutes revealed officials remain divided on rate cuts, with "many" participants favoring no further cuts through year-end 2025.
- Cryptocurrency Collapse: Ethereum (ETH.X) fell below $3,000 after dropping over 40% from record highs, while total crypto market cap shed over $1 trillion from peak levels, with Bitcoin marking its deepest correction since TerraUSD's 2022 collapse.
- UK Inflation Moderates: British pound weakened as UK inflation slowed to 3.6% in October, below expectations, though core inflation remained sticky at 3.4%, tempering expectations for immediate Bank of England rate cuts.
Overview
The week of November 17-21, 2025, presented a sharp inflection in market sentiment as euphoria over artificial intelligence investments gave way to mounting concerns about capital allocation, valuations, and economic growth. The week began with modest optimism as traders positioned for Nvidia 's highly anticipated earnings release, yet the subsequent market response revealed the fragility underlying the technology sector's dominance. While Nvidia 's record earnings and robust fourth-quarter guidance initially provided relief, suggesting the AI boom remains intact, broader market dynamics told a different story—a deepening reassessment of whether extraordinary spending on AI infrastructure can justify current valuations and corporate investments.
The equity market's failure to hold gains despite stellar semiconductor sector earnings underscored a critical shift in risk sentiment. Major indices violated key technical levels, breaking below their 50-day moving averages for the first time in months, a development that typically presages further weakness. Concurrently, cryptocurrency markets experienced their most severe contraction in three years, with Bitcoin cascading through psychological price levels and Ethereum cratering alongside broader digital asset liquidations. These coordinated moves across risk assets—equities, cryptocurrencies, and high-valuation equities—reflected a pronounced rotation away from speculative positioning toward defensive positioning as investors grappled with the implications of a potentially higher-for-longer interest rate environment and slowing labor market dynamics.
Financial Markets Weekly Recap
Equities
Market Indices: The week began on a defensive footing as the S&P 500 (SPY) dropped 0.9% on Monday, November 17, falling below 6,700 and snapping its 50-day moving average for the first time since April 30. This 138-session streak represented the second-longest stretch above the 50-day moving average this century, making its breach a significant technical event. The Nasdaq (QQQ) initially flashed green early in the week as traders anticipated Nvidia 's earnings, but momentum evaporated after the company reported results on Wednesday evening. The index subsequently shed 2.2% as the market's red-hot rally reversed into a sharp selloff, reflecting growing anxiety about whether the AI investment boom can deliver returns commensurate with capital deployment. The Dow Jones (DIA) fell 1.2% on Monday alone, or 557 points, leading the decline among major indices and signaling broad-based weakness rather than sector-specific rotation.
Breadth deteriorated sharply by week's end. The share of Nasdaq 100 constituents trading above their 50-day moving average collapsed from approximately 50% on November 12 to just 28% by Thursday, November 20, a stark reversal that suggests momentum is definitively broken. The broader market's failure to hold above its 50-day moving average despite Nvidia 's stellar earnings highlights a critical divergence: while the AI narrative remains intact, the market's underlying structure suggests weakness may persist even without fundamental deterioration.
Sector Performance: The technology sector, once seemingly immune to broader market weakness, faced intense pressure as semiconductor stocks and AI-related equities retreated sharply. Nvidia (NVDA) initially surged 5-6% after reporting earnings on Wednesday, but subsequently reversed lower, closing down on Thursday and Friday despite its record results. This post-earnings selloff, particularly unusual given the company's strong beat and robust guidance, underscored the market's deep-seated concerns about AI capital concentration and circular funding dynamics. Major cloud infrastructure providers, including Meta (META), Amazon (AMZN), and Alphabet (GOOGL), all experienced pressure as investors reassessed the sustainability of multi-hundred-billion-dollar annual AI capital expenditure commitments. Advanced Micro Devices (AMD), Super Micro Computer (SMCI), and Dell Technologies (DELL), all major beneficiaries of the AI infrastructure boom, faced significant declines as sentiment soured.
The rotation into defensive sectors accelerated as investors positioned for economic slowdown. Bank of America's latest Global Fund Manager Survey revealed that 45% of investors identified the "AI bubble" as the top tail risk facing markets and the economy—a striking finding that marked the first time in two decades fund managers believed companies were overinvesting in capital spending. This assessment directly challenged the prevailing bull case and suggested a major inflection in institutional sentiment.
Corporate Highlights:
- Nvidia (NVDA): The AI chip powerhouse delivered record third-quarter results on Wednesday, November 19, with revenue reaching $57 billion, up 62% year-over-year and exceeding analyst expectations of $54.9 billion. Profit surged 65% to $31.9 billion, or $1.30 per share, beating the consensus estimate of $1.25. The company's data center segment, which generates the vast majority of revenue, contributed $51.2 billion in sales, significantly outpacing the $49.09 billion estimate, with compute sales (GPU revenue) reaching $43 billion. CEO Jensen Huang asserted that "sales of Blackwell are unprecedented, and our cloud GPUs are completely sold out," emphasizing that AI chip demand remains robust despite market anxieties. The company guided to approximately $65 billion in fourth-quarter revenue (plus or minus 2%), substantially exceeding the $61.66 billion Wall Street consensus forecast. The guidance and commentary suggested that the AI buildout remains in its early phases and that returns on deployed capital are justifying continued investment. However, the company also disclosed increasing customer concentration: its top four customers accounted for 61% of Q3 revenue, up from 56% in Q2—a concerning metric that highlights risk should any major hyperscaler reduce capital intensity. Despite these impressive results, Nvidia reversed sharply on Thursday as markets absorbed implications for valuations and leveraged positions, suggesting the company's stellar performance alone could not arrest the broader risk-off move.
- September Jobs Data and Labor Market: The delayed September employment report finally surfaced on Thursday morning, November 20, revealing that the US economy added 119,000 jobs—above the 50,000 consensus estimate but reflecting stagnating labor market momentum. The unemployment rate rose to 4.4%, the highest level since October 2021, up from 4.3% in August. The rise in joblessness despite job gains reflected broad-based weakening in labor force participation and full-time employment dynamics. Healthcare led hiring with 43,000 jobs added, while leisure and hospitality contributed 47,000, but offsetting weakness emerged across professional services (down 20,000), transportation and warehousing (down 25,000), and temporary employment (down 16,000). The report's significance was amplified by the fact that it represented the first clear employment picture since the government shutdown, though the delayed data (nearly two months old) offered limited insight into November conditions. The mixed nature of the report—stronger headline numbers but weaker labor force dynamics—exemplified the stagnation characterizing the broader economy and complicated the Federal Reserve's policy calculus.
- Fed October Minutes and December Uncertainty: The Federal Reserve released minutes from its October 28-29 meeting on Wednesday, November 19, revealing sharp divisions among policymakers regarding interest rate policy. While the FOMC voted 10-2 to cut rates by 25 basis points to a range of 3.75-4.00% in October, the minutes showed "many" officials believed it would be "appropriate" to maintain rates unchanged through the remainder of 2025. This messaging directly contradicted market expectations of a December rate cut that had been priced at roughly 50% odds. The divisions centered on competing concerns: whether a stalling labor market or persistent inflation represented the greater risk to the economy. Some officials argued that existing policy remained "restrictive" to growth even after the quarter-point cut, while others pointed to "the resilience of economic activity" as evidence that policy was not overly tight. Notably, one participant (identified as Stephen Miran) advocated for a half-point cut, while Jeffrey Schmid voted against any cut. The Fed maintained its balance sheet at approximately $6.6 trillion and agreed to halt its quantitative tightening program in December—a dovish element that provided limited offset to the hawkish messaging on rates.
Cryptocurrencies
The digital asset markets experienced catastrophic declines throughout the week, marking the most severe contraction since the 2022 TerraUSD and FTX collapse. Bitcoin (BTC.X) deteriorated progressively as the week advanced, falling from around $92,000 at the beginning of the week to $82,605 by Friday, a decline exceeding 10% in less than seven days and wiping out all 2025 gains. The cryptocurrency's break below the critical $92,000 support level triggered cascading liquidations across leveraged futures positions, with algorithmic selling accelerating declines as stop-loss levels were triggered. Bitcoin fell to its lowest level since April 2025, a seven-month low, and total liquidations exceeded $1.2 billion in the 24 hours preceding Friday's close. Global crypto market capitalization contracted from approximately $4.2 trillion to $3.2 trillion, representing a loss exceeding $1 trillion in market value—a stunning deterioration that reflected the sector's extreme leverage and sensitivity to macro risk-off dynamics.
Ethereum (ETH.X) proved even more vulnerable, declining to below $3,000 by week's end after cascading from an August 2025 record high above $5,000. The second-largest cryptocurrency by market capitalization shed more than 40% from its recent record, entering what many traders characterized as a sustained bear market. Major altcoins including Solana (SOL.X), Binance Coin (BNB.X), and Ripple (XRP) all posted double-digit losses, indicating that liquidation cascades affected the entire digital asset ecosystem rather than single assets. The weakness in Bitcoin and Ethereum reflected multiple factors: rising US Treasury yields deterring investment in non-yielding assets, fading expectations for a December Federal Reserve rate cut, liquidations of leveraged positions held by prominent investors (including reported forced selling by MicroStrategy (MSTR), and broader risk-off sentiment as investors fled speculative assets.
One particularly damaging element emerged from DeFi (decentralized finance) concerns: a $100 million exploit affecting the Balancer protocol, combined with other smart contract vulnerabilities, further eroded confidence in the crypto infrastructure. Additionally, spot Bitcoin and Ethereum ETFs recorded combined outflows of $1.8 billion across four consecutive sessions, suggesting that even institutional investors were reassessing their digital asset allocations.
Currencies
GBP/USD: Sterling finished the week at approximately 1.3045, down 0.22% from the previous session and marking a 2.33% decline over the past month despite a 4.12% gain over the past 12 months. UK inflation data released mid-week showed headline CPI slowing to 3.6% in October from 3.9% in September, beating expectations for 3.7% and providing some relief to Bank of England officials who have been debating further rate cuts. Core inflation, excluding volatile food and energy prices, moderated to 3.4%, also below expectations. The slowdown was primarily attributable to temporary factors, particularly the Ofgem energy price cap reduction that dramatically lowered household electricity and gas costs. Services inflation proved stickier, easing only slightly to 4.5%, suggesting underlying wage and supply-chain pressures persist. The mixed inflation picture—benign headline numbers masking sticky services inflation—likely complicated the Bank of England's policy decisions ahead of its December meeting. Chancellor Rachel Reeves signaled a November 26 tax and spending statement aimed at reducing living costs further, adding policy support to help steer inflation lower. Despite the moderating inflation, sterling faced headwinds from broader US dollar strength as investors awaited clarity on Federal Reserve policy following the September jobs report.
Economic Indicators and Policy Developments
The week proved particularly rich in economic data and policy developments that shaped market sentiment. The delayed September jobs report showed resilience in hiring with 119,000 nonfarm payroll additions against consensus expectations of 50,000, but the unemployment rate rose to 4.4%, suggesting that job growth occurred alongside labor force contraction—an atypical dynamic that signaled a deteriorating underlying labor market. Initial jobless claims for the week ending November 15 came in at 220,000, down 8,000 from the prior week but above the 227,000 consensus estimate. The report also included significant downward revisions to prior months: August's job gains were revised down by 26,000 (from 159,000 to 133,000), meaning the economy actually lost 4,000 jobs that month, while July was revised down 7,000 to 72,000. These revisions emphasized the stagnation gripping labor markets throughout 2025.
Federal Reserve communications dominated midweek proceedings. The Fed's October meeting minutes revealed deep divisions among policymakers about the appropriate policy path, with the 10-2 vote on the October rate cut itself reflecting significant internal debate. The language of the minutes—distinguishing between "many" (a larger group) and "several" (a smaller group) participants—conveyed that a majority of officials now lean against further rate cuts through year-end. Fed Chair Jerome Powell and Vice Chair Philip Jefferson adopted cautious stances, noting that rate-cut trajectories depend on incoming economic data and the evolution of inflation risks. This messaging triggered a meaningful repricing of Fed funds futures, with December rate-cut odds plummeting from near-certainty in early October to below 50% probability.
The AI investment overhang continued to frame market sentiment despite Nvidia 's stellar results. Bank of America 's Global Fund Manager Survey, conducted November 7-13 among 202 panelists managing $550 billion in assets, revealed that 45% of investors identified an "AI bubble" as the top tail risk to markets—the highest concentration around a single risk factor in recent years. The survey showed net 20% of respondents believing companies are deploying capital too aggressively, a sentiment last observed in August 2005 before the great financial crisis. Comments from prominent investors, including short positions held by Michael Burry (of financial crisis fame) in Nvidia and Palantir (PLTR), suggested that skepticism about AI valuations and return profiles continues to mount despite Nvidia's seemingly unassailable market position. Some analysts flagged concerns about "circular financing" dynamics, where major cloud providers funded by venture capital investors and debt markets were essentially funding each other's AI infrastructure investments, raising sustainability questions when capital becomes constrained.
Market Outlook
As financial markets head into the final weeks of November 2025, several critical themes will likely shape trading dynamics:
Valuations and Reversion Risk: The equity market's failure to hold onto gains despite Nvidia 's record earnings suggests investors are reconsidering whether technology and AI-adjacent valuations can be justified by near-term earnings power. The Nasdaq and broader technology sector trading below their 50-day moving averages for the first time in months indicates that technical momentum has definitively shifted, and further weakness may follow as institutional investors reassess positioning.
Interest Rate Expectations: The Federal Reserve's clear messaging that December rate cuts remain uncertain has substantially shifted market expectations. Given stagnating labor market momentum and sticky inflation in services sectors, the Fed may indeed maintain rates through year-end 2025, a scenario that would pressure highly leveraged equities and cryptocurrencies while supporting the US dollar and fixed income assets.
Cryptocurrency Stabilization: After catastrophic weekly declines, Bitcoin and Ethereum may find support around key technical levels ($82,000-$85,000 for Bitcoin , and $2,800-$3,000 for Ethereum ), though sustained recovery likely requires either macro conditions to ease or a major technical catalyst. The liquidation-driven decline, while painful, may ultimately reset leverage and allow for gradual recovery if macro risks ease.
Corporate Earnings Trajectory: While Nvidia delivered, expectations for other major technology providers remain uncertain. Meta , Amazon , Alphabet , and Microsoft (MSFT) will face scrutiny regarding their AI capital spending returns and future deployment plans as investors question the wisdom of multi-hundred-billion-dollar expenditure commitments.
The week of November 17-21 marked a significant inflection in market sentiment, where the previous "ask first, questions later" embrace of AI and technology stocks gave way to fundamental reassessment. The coming weeks will likely determine whether this represents a sustained correction or merely a tactical pullback within a broader uptrend. For professional investors and traders, positioning defensively while awaiting clarity on Fed policy and corporate capital allocation appears prudent, while the technical breaks in equities and cryptocurrency markets suggest downside risks remain material into year-end 2025.