Tech-Fueled Selloff Continues, Shutdown in Focus

Published as of: November 7, 2025, 9:16 a.m. ET

(Friday market open) Wall Street's worst week in a month ends today with consumer sentiment and credit data that could provide more breadcrumbs for investors. Focus remains on the D.C. shutdown and concerns about AI valuations that sent the tech-heavy Nasdaq Composite down almost 2% yesterday for the third major sell-off in the last few weeks. Stocks continued their retreat this morning as Magnificent Seven stocks stayed red, including a nearly 2% pre-market drop for Nvidia (NVDA). Volatility ticked up.

"The speculative and momentum sentiment that helped lift many tech shares—including some with no profits—appears to be fading a bit," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research. "This could have some negative repercussions for stocks, or it could result in rotation as money flows into higher-quality tech stocks or those sectors with more attractive valuations."  Bitcoin's recent drop below $100,000, the move by the Russell 2000^® (RUT) below its 50-day simple moving average, and the lopsided under-performance in tech are all evidence of "deleveraging" in the speculative and momentum space, Peterson added. Dip-buying hasn't shown up so far this week.

Another pressure point is the D.C. shutdown, now hitting travelers and airlines as the Federal Aviation Administration cuts flights by 10%. "There's no question that pressure is increasing on senators to find a resolution to the shutdown," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab, in his WashingtonWise podcast. "Bipartisan discussions in the Senate about finding compromise picked up steam this week but haven't involved senior party leaders or the president. A quick resolution is far from a slam dunk, but there's a growing sense on both sides of the aisle that the shutdown has become unsustainable."

1. Pressure grows to solve shutdown ahead of holiday: Perhaps the biggest shutdown pressure point of all is increasing delays at airports, where air traffic controllers and Transportation Security Administration (TSA) agents have been staging sick-outs as a protest against being forced to work without pay. Now the government has ordered airlines to reduce flights by 10% at 40 major airports, disrupting travel plans further. "With the Thanksgiving holiday travel period now less than three weeks away, public frustration is putting pressure on both sides to find a resolution," my colleague Townsend said. The shutdown also hurts companies, which face longer waits for government permits or other regulatory needs. Ultimately, it could hurt the Wall Street banks if it slows demand for initial public offerings, and airlines have to cut back flights by 10%. A Senate vote is expected today on funding the government, but Politico reports that Democrats are likely to block the effort while talks go on about a stopgap measure into December or January that would re-open the government and pave way for a future vote on extending Affordable Care Act subsidies.
    
2. Mixed jobs data precede sentiment report: Private jobs data this week showed rising hiring but also increased layoffs. Though consumer demand appears relatively strong heading into the holidays, the jobs picture might be hurting sentiment. Investors get an update today at 10 a.m. with preliminary November consumer sentiment, followed by a 3 p.m. ET report on September consumer credit. Consensus is 54 for headline sentiment, up slightly from 53.6 in October but still near historic lows. Inflation expectations are a key aspect after a rise last month. The market indicates about two chances in three of a December rate cut, but that's far from a done deal. "The likelihood of a cut next month is a lot lower than it was just a week or a week and a half ago," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research. "That sounds right to us, but maybe even a little bit high. We think the bar to warrant a cut is higher than a lot of people probably expect." While there were headlines in 2022 and 2023 about an uptick in layoffs, it didn't translate into a significant deterioration in the labor market, Martin added. Fed dove Stephen Miran speaks at 3 p.m. ET.
    
3. Earnings progress check ahead: Stay tuned at midday for the latest weekly earnings update from FactSet, which averages analysts' estimates of S&P 500 reporting metrics. Last week, FactSet pegged third quarter earnings growth at nearly 11%, but also noted that the S&P 500 index traded at a three-year high in terms of forward price-to-earnings, or P/E, at 23.1. That's based on the average Wall Street 12-month earnings per share estimate of $298.56 for the next 12 months. As earnings grow, P/E can come down, but only if stocks stabilize. The S&P 500 index is up about 14% year to date, but analysts expect calendar year 2025 earnings growth of around 11%, according to FactSet. That explains how the P/E ratio can grow even as earnings rise. Earnings likely to get attention next week include CoreWeave (CRWV), Oklo (OKLO), Cisco (CSCO), Applied Materials (AMAT), and Walt Disney (DIS).

• Constellation Energy (CEG) lost steam this morning, falling more than 5% in pre-market trading after reporting earnings judged as mixed by Wall Street. Revenue exceeded consensus views, but earnings missed. The company raised the lower end of its annual earnings forecast but lowered the high end.
   
• Nvidia, Palantir (PLTR), Advanced Micro Devices (AMD), Super Micro Computer (SMCI), Arm Holdings (ARM), Broadcom (AVGO), and other AI-related stocks all were in the red this morning to varying degrees, with losses generally in the 1% area. Nvidia is now down about 13% from its October 29 intraday high, and AMD fell 7% yesterday alone. Fresh news for the sector is thin, and the selling mainly seems to reflect valuation concerns.
   
• Tesla (TSLA) slipped less than 1% ahead of the open after shareholders approved a $1 trillion pay package for CEO Elon Musk. The package requires him to meet "ambitious goals, to vastly expand the company's stock market valuation — to $8.5 trillion from around $1.4 trillion," The New York Times reported.
   
• Shares of ride-share company Lyft (LYFT) rose more than 5% Thursday on strong earnings in a quarter that saw gross bookings climb 16%.
   
• Datadog (DDOG) powered to 23% gains yesterday as analysts expressed enthusiasm about quarterly revenue gains for the cloud software company. AI-driven demand for cloud security products has been on the rise, CNBC reported, raising demand for Datadog's technologies.
   
• PENN Entertainment (PENN) dove 10% yesterday on news that Disney's ESPN and PENN are ending their sports betting partnership. ESPN is signing with DraftKings (DKNG), though shares of that company are down 6% this morning after the company's earnings came up short late Thursday.
   
• United Airlines (UAL) and Delta Air Lines (DAL) fell 1% and 0.5% ahead of the open today, with air travelers bracing for delays and cancellations due to the Federal Aviation Administration cutting flights by 10% during the government shutdown.
   
• Affirm Holdings (AFRM) rose 5% ahead of the open after earnings beat expectations.
   
• Expedia (EXPE) soared 15% before the open after the company topped consensus for earnings and revenue and raised its fiscal 2025 revenue forecast above consensus views.
   
• Airbnb (ABNB) rose 4% ahead of the open after beating analysts' revenue expectations and delivering a stronger-than-expected forecast.
   
• Bitcoin (/BTC) fell about 1% in pre-market action. Crypto-related shares tumbled yesterday as risk-off sentiment pushed bitcoin futures down 3%. Shares of stocks linked to crypto, including Coinbase (COIN) and Strategy (MSTR), were both down 2% in early trading.
   
• Treasuries and the dollar both edged lower this morning, a sign that "flight to safety" isn't necessarily a factor during this tech-fueled sell-off. Yesterday featured defensive sectors including health care and energy among the S&P 500 leaders, suggesting some investors might be looking for less volatile places to buy.
   
• The Cboe Volatility Index, or VIX, climbed above 20 this morning and VIX futures remain in contango, suggesting more choppiness could be ahead. The 20 level is generally considered a line between lighter and heavier volatility.
   
• From a technical perspective, Thursday was a disappointing day for bulls as the S&P 500 index closed below its 20-day moving average—now at 6,748—for the first time since October 17. The 50-day moving average is 6,665 and may be a level to watch. The SPX hasn't dipped below it since May, but came close in October.

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The Nasdaq-100^® Index (NDX—candlesticks), which includes many of the largest info tech firms, slid under its 50-day moving average (blue line) yesterday for the first time since mid-October, and has been in a weak technical pattern making lower lows and lower highs lately. This is seasonally against the grain, though markets can go up or down in any given month.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

November 10: Expected earnings from Tyson Foods (TSN), CoreWeave (CRWV), and Occidental Petroleum (OXY).
November 11: Expected earnings from Beyond Meat (BYND).
November 12: Expected earnings from Circle Internet Group (CRCL) and Cisco (CSCO).
November 13: October CPI and core CPI, and expected earnings from Walt Disney (DIS), NetEase (NTES), JD.com (JD), and Applied Materials (AMAT).
November 14: October PPI and core PPI, October retail sales.