Market Downturn

Despite Nvidia CEO Jensen Huang’s optimistic outlook on chip sales and AI’s potential, tech and AI stocks experienced a downturn this week. While Huang downplayed “AI bubble” concerns, the initial market boost quickly dissipated. Beyond Nvidia, Alphabet was the only Magnificent 7 stock to gain. Other chip stocks and AI-related companies like AMD, Micron, Oracle, and Palantir also faced significant declines, fueled by bubble concerns and scrutiny over AI investment returns. Investors are demanding demonstrable profitability for AI technologies.

Bitcoin plunged to a six-month low due to risk aversion and speculation surrounding the Federal Reserve’s upcoming interest rate decision, triggered by strong U.S. jobs data that dampened expectations of a December rate cut. The cryptocurrency market experienced a broad decline, with XRP and Ether also falling. The downturn also impacted equities, despite Nvidia’s positive earnings, due to correlated trading patterns between AI stocks and Bitcoin. Ongoing liquidations of leveraged crypto positions further exacerbated the price decline.

Wall Street faced a volatile week, with the Nasdaq falling over 3% and the S&P 500 declining 1.6%, ending winning streaks. Concerns about AI stock valuations, particularly Nvidia, and uncertainty in China contributed to the downturn. New jobs data and consumer sentement was also low. Strategic moves included buying Starbucks and Boeing shares, adding GE Vernova stock for its AI-related benefits. Eli Lilly gained on strong GLP-1 agreement news and encouraging drug trial results. Eaton, DuPont, and Solstice Advanced Materials released earnings reports of mixed quality. Rising beef prices impacted restaurant like Texas Roadhouse.

Tesla’s German sales plummeted in October 2025, despite overall EV market growth. Only 750 units were sold, a 50% year-over-year decrease. Analysts attribute this decline to several factors: Elon Musk’s polarizing image impacting brand perception, increased competition from European and Chinese automakers offering cheaper EVs, and the discontinuation of EV purchase incentives. Tesla introduced a lower-cost Model Y in response, but its impact remains unclear. A planned government incentive program in 2026 may boost overall EV adoption but won’t necessarily favor Tesla.