As November wraps up, a holiday-shortened week of trading, courtesy of Thanksgiving Day and Black Friday, will greet investors who continue to wrestle with the fallout from Nvidia’s (NVDA) blockbuster earnings report alongside flagging confidence in the overall AI-driven market.
On Friday, markets capped a roller-coaster week with daily gains but weekly losses, as the tech-heavy Nasdaq Composite (^IXIC) fell over 2% while the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) fell about 1.5% for the week.
A strong September jobs report, strong earnings from Nvidia, and a positive third quarter report from Walmart were all greeted Thursday by one of the market’s biggest intraday reversals of the last decade, with the S&P 500 flipping from a gain above 1.5% at the opening bell to a loss of more than 1.5% by market close. The swing in the Nasdaq was even greater.
In the week ahead, the economic calendar will continue to pick up steam as the government works through a data backlog following the resolution of the shutdown earlier this month.
Data on producer prices in September from the Bureau of Labor Statistics and the Census Bureau’s retail sales data for the same month will be highlights, with both reports due out Tuesday amid a rush of data ahead of the Thanksgiving weekend. Investors will also keep a close eye on The Conference Board’s consumer confidence reading for November, due out Tuesday.
Read more: What is consumer confidence, and why does it matter?
In the corporate world, a relatively quiet week of earnings awaits investors. Alibaba Holdings (BABA), Dell Technologies (DELL), and a smattering of retailers including Kohl’s (KSS) and Best Buy (BBY) will headline the calendar for the week.
‘The momentum simply was not there’
It’s been a tough month for tech bulls.
Several of the “Magnificent Seven” stocks, crypto, and AI-focused plays like CoreWeave (CRWV) and Oracle (ORCL) have seen their stocks fall sharply in the past month.
Meta (META) and Oracle have lost more than 15% and 25%, respectively, as both outlined plans for even more AI spending. Microsoft (MSFT) stock has dropped 9% in the last month.
Nvidia stock is roughly flat over the period, while smaller chip plays like AMD (AMD) and Intel (INTC) have lost closer to 10%.
Nvidia’s earnings report on Wednesday evening offered plenty for AI bulls to be excited about. And its CEO, Jensen Huang, summarily dismissed fears about an AI bubble on the company’s earnings call, telling investors, “We see something very different.”
After initially rallying, Nvidia stock faded during the day on Thursday. On Friday, the stock fell another 1%.
“Nvidia just reaffirmed its role as the market’s sentiment anchor,” Jake Behan, the head of capital markets at Direxion, wrote in an email.
The negative reception to a positive earnings report encapsulates investor sentiment as we approach the final month of the year.
“The momentum simply was not there [on Thursday] to carry the rally through, with the passing of two critical risk events — both with positive outcomes, no less — not enough to kill the bearishness gripping the markets currently,” Capital.com analyst Kyle Rodda wrote in an email.
This month’s fears have largely centered on the infrastructure spending boom major tech companies say is necessary to meet demand for artificial intelligence, Northlight Asset Management chief investment officer Chris Zaccarelli wrote in an email. And the worry is that this boom — which has seen tech giants commit hundreds of billions towards — is turning into a bubble.
Read more: How to protect your portfolio from an AI bubble
“But in the meantime, the largest technology companies in the world are extremely profitable and they are reinvesting billions of dollars into data centers, servers, and chips and the spending is real,” Zaccarelli said.
Institutional investors like hedge funds and pension funds have been piling into tech’s heavyweight names, with institutional portfolios adding $348 billion in Nvidia holdings during the third quarter, according to regulatory data compiled by LPL Financial. Total institutional holdings for both Nvidia and Microsoft have surpassed $2 trillion.
‘Proxy for speculation’
While stocks notched a tough week in the red, the major indexes remain far above the lows seen in April shortly after President Trump announced his surprise “Liberation Day” tariffs.
Bitcoin (BTC-USD), on the other hand, has not held up as well.
The world’s largest cryptocurrency fell sharply this past week, approaching $80,000 at Friday’s lows and coming within a few percentage points of April’s doldrums. Year to date, bitcoin has dropped nearly 10%.
For companies that have made their business model acquiring bitcoin, like Michael Saylor’s Strategy (MSTR), which pioneered the digital asset treasury model, performance has been even worse. Strategy is down more than 40% on the year.
It might be tempting to look at bitcoin’s downturn as an event isolated to the more speculative crypto markets. But these markets have become mainstream parts of the financial market fabric, and as such, have “become such a proxy for speculation” that this week’s selling can’t be viewed in isolation, Interactive Brokers’ chief strategist Steve Sosnick wrote in an email.
Macquarie Bank global strategist Viktor Shvets compared the links between “AI and digital platforms (chips, data centers, blockchain, stablecoins and cryptos)” to the Japanese concept of keiretsu, where a group of companies, instead of all acting as independent competitors, all hold stakes in the others and operate more as one entity.
“While such links facilitate co-operation, they also create vulnerabilities, especially at times of distress,” Shvets wrote in a recent note to clients. “Keiretsu magnifies such vulnerabilities, as an avalanche cascading through complex links.”
If the market turns bearish on tech, crypto is likely to be taken along for the ride in Shvets’s “American Keiretsu.”
Economic and earnings calendar
Monday
Economic data: Chicago Fed national activity index, October; Dallas Fed manufacturing activity, November (-5.0 previously)
Earnings: Agilent Technologies (A), Symbotic (SYM), Keysight Technologies (KEYS), Zoom Communications (ZM), StoneX Group (SNEX)
Tuesday
Economic data: Retail sales, month-on-month, September (+0.6% previously); Producer price index, month-on-month, September (-0.1% previously); PPI ex-food and energy, month-on-month, September (-0.1% previously); PPI, year-on-year, September (+2.6% previously); PPI ex-food and energy, year-on-year, September (+2.8% previously); FHFA home price index, month-on-month, September (+0.4% previously); Richmond Fed manufacturing index, November (-4 previously); The Conference Board consumer confidence, November (93.3 expected, 94.6 previously); Pending home sales, month-on-month, October (0% previously); Dallas Fed services activity, November (-9.4% previously)
Earnings: Alibaba (BABA), Analog Devices (ADI), Dell Technologies (DELL), Autodesk (ADSK), Workday (WDAY), Zscaler (ZS), HP Inc. (HPQ), DICK’S Sporting Goods (DKS), Burlington Stores (BURL), Best Buy (BBY), Urban Outfitters (URBN), Pony AI (PONY), Abercrombie & Fitch (ANF), Kohl’s (KSS)
Wednesday
Economic data: MBA Mortgage Applications, week ended Nov. 21 (-5.2% previously); Initial jobless claims, week ended Nov. 22 (220,000 previously); Durable goods orders, September, preliminary reading (+2.9% previously); MNI Chicago PMI, November (43.8 previously); Federal Reserve’s Beige Book
Earnings: Deere & Company (DE), Li Auto (LI), Diginex Limited (DGNX), New Fortress Energy (NFE)
Thursday
Economic data: US markets closed for Thanksgiving holiday.
Earnings: US markets closed for Thanksgiving holiday.
Friday
Economic data: No notable economic data.
Earnings: Nordic American Tankers (NAT), Platinum Group Metals (PLG)
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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