Key Highlights
- The tech-heavy Nasdaq dropped 0.2% on Friday, closing the week down 3%, its worst drop since April.
- Consumer sentiment hit historic lows with a reading of 50.3, marking a 6.2% monthly drop and about 30% lower than this time last year.
- Investors are panicking over AI spending, with the worst-performing stock in the S&P 500 being Super Micro Computer, which fell about 25% this week.
- The Dow Jones Industrial Average and S&P 500 saw small upticks on Friday, rising about 75 points or nearly 0.2%, and up around 0.1%, respectively.
Stock Market Plummets Amidst AI Spending Concerns
The tech-heavy Nasdaq suffered a significant drop this week, with its worst performance since April’s “Liberation Day” tariffs sparking a massive sell-off. The Nasdaq closed the week down 3%, marking a 0.2% decline on Friday alone.
Consumer Sentiment at Historic Lows
The latest data from the University of Michigan showed that consumer sentiment hit its lowest level in over three years, with a reading of 50.3. This marked a 6.2% drop for the month and about 30% lower than this time last year—near the worst-ever level for consumer sentiment.
The government shutdown, now entering its 38th day, set a new record, contributing to broader economic concerns regarding inflation. Prices have soared across various sectors, from household items like coffee and toys to more significant purchases such as furniture and online deals.
AI Spending Panic Hits Tech Stocks
The tech sector faced heightened pressure this week due to concerns over AI spending. Analysts raised questions about whether stocks were overvalued, reminiscent of the dot-com bubble in the late 1990s. The worst-performing stock was Super Micro Computer, which sold equipment for AI data centers and fell about 25% this week.
About $1 trillion in market value was wiped from a drop in shares this week among Microsoft, Nvidia, AMD, Palantir, Oracle, and Meta.
Notably, AMD, Nvidia, and Oracle each saw their stocks fall by around 10%, while Meta dropped about 6% during the same timeframe, and Microsoft tumbled roughly 5%.
The tech sell-off began earlier in the week after software giant Palantir reported earnings on Tuesday. Despite beating top and bottom-line expectations, concerns arose over whether the company’s valuation was inflated. “Big Short” investor Michael Burry revealed a short position in the firm, leading to further market volatility.
President Trump’s Economic Agenda
Despite the economic downturn, President Trump remained optimistic about AI, stating, “No, I love AI.” He continued, “We’re leading China, we’re leading the world,” after Election Day wins by New York City’s socialist Mayor-elect Zohran Mamdani and Democratic gubernatorial candidates Mikie Sherrill in New Jersey and Abigail Spanberger in Virginia. His comments came amid broader concerns about AI spending and market instability.
While the tech-heavy Nasdaq ended the week on a low note, the Dow Jones Industrial Average and S&P 500 showed slight improvements, with the Dow rising about 75 points or nearly 0.2%, and the S&P going up around 0.1% on Friday.
The ongoing government shutdown, concerns over inflation, and AI spending worries continue to cast a shadow over market sentiment as we approach the end of November 2025.
