Tech Losses Mount on AI Valuation, Rate Concerns

Published as of: November 14, 2025, 9:14 a.m. ET

(Friday market open) Tech shares cratered again early Friday after major indexes suffered their worst day in more than a month amid fresh concerns over missing government data, sliding chances of a rate cut, and tech valuations. Magnificent Seven stocks fell across the board ahead of the open, including 4% for Tesla (TSLA) and 3% for Nvidia (NVDA), while volatility kept climbing and Treasury yields lost ground. Wall Street appears on pace for its second straight losing week barring a last-minute "buy the dip" effort.

"The market continues to aggressively move toward pricing out a December Fed rate cut," said Kevin Gordon, head of macro research and strategy, Schwab Center for Financial Research. Cleveland Federal Reserve President Beth Hammack said Thursday she's worried about the labor market, but getting inflation back to 2% is critical. And Minneapolis Fed President Neel Kashkari said he's undecided about the December vote. Three more Fed speakers line up today, including Kansas City Fed President Jeff Schmid, whose remarks might have extra weight since he dissented in the last rate cut vote.

Chances of a rate cut in December now look like a coin flip after starting the week near 66%. Still, odds of a cut in January are now above 70%, according to the CME FedWatch Tool. This suggests the Fed pausing for a month until it has more clarity. That said, officials warn that some of October's employment and inflation reports may not get fully reported, and inflation data that has surfaced—including higher prices paid in the October ISM Services report—may be damaging rate cut hopes. All this is driving a "risk-off" move across the markets, including in cryptocurrencies.

1. AI worries show up on Wall Street: Nvidia (NVDA) plunged more than 4% yesterday despite a lack of major negative news. The entire AI sector, including major chip firms Broadcom (AVGO), Advanced Micro Devices (AMD), Intel (INTC), and Micron (MU) took it on the chin Thursday and again this morning amid valuation concerns and worries that companies may not be "monetizing AI" as quickly as hoped. Nvidia reports earnings next Wednesday. Other tech firms that have ridden the AI wave this year, including Palantir (PLTR), Oracle (ORCL), AppLovin (APP), Super Micro Computer (SMCI), and CoreWeave (CRWV), fell sharply Thursday and slid again early today, and semiconductors as a sector lost more than 4% to their lowest level since October 22. Though comparisons to the dot.com bubble are out there, it's also worth noting that many high-flyers then had no real earnings power, while the Magnificent Seven and today's rallying chip firms have solid growth. For instance, AMD said this week it expects to drive a better than 35% revenue compound annual growth rate the next three to five years and that AI data center revenue should grow by more than 80% per year. Still, it's possible companies that depend on borrowing to keep up the tech spending spree could face a rougher road if rates stay where they are.
    
2. Earnings growth impresses: Though data remain cloudy, more than 90% of S&P 500 companies have shared third quarter earnings, and results generally impressed. "Corporate America has again cleared a high bar" with blended growth at nearly 17% year over year and strong earnings expected to spill into next year, led by tech, said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research. The percentage of companies beating earnings expectations is running at nearly 83%, compared to a long-term average of 67% and the prior four-quarter average of 77%, Sonders said, while companies beat analysts' estimates on revenue at a 78% rate, up from the long-term average of 62%. "If 2026 delivers even a portion of the current near-14% growth expectations, the bull case for the stock market will hinge less on another wave of AI-related euphoria and hopefully more on a broadening of profit growth across the S&P 500's rank and file," Sonders said. Earnings growth for the full year 2025 is seen at 12.5%, ramping to 13.8% in 2026, according to LSEG I/B/E/S.
    
3. Bitcoin slides past $100,000: Bitcoin sliced through a key support level just below $100,000 after dropping more than 3% on Thursday, when it traded as low as $98,138, the lowest since May. By early today, Bitcoin futures (/BTC) were beneath that level and below $95,000. The trend has been down since the flash crash of October 10, but selling had dried up and buyers had stepped in during multiple tests of the $100,000 area over the past couple of weeks. Now sentiment has shifted toward risk-off, and a sustained move below $99,000 could cause selling to accelerate due to possible automatic liquidation of highly leveraged positions at that level, said Jim Ferraioli, director of digital currencies research and strategy at the Schwab Center for Financial Research. 

• Warner Bros (WBD) rose 2% in pre-market trading after The Wall Street Journal reported that several firms, including Netflix (NFLX) and Paramount Skydance (PSKY) are preparing bids for the entertainment firm. The deadline is November 20.
   
• Walmart (WMT) fell nearly 3% this morning on news that CEO Doug McMillon will retire next year and be succeeded by John Furner, CEO and president of Walmart's U.S. operations.
   
• Apple fell about 0.5% this morning despite a Reuters report that iPhone sales rose 22% in China after the iPhone 17 got released.
   
• Applied Materials (AMAT) capsized 7% ahead of the open, the latest tech firm to lose ground on earnings news. The semiconductor equipment maker topped consensus expectations but didn't impress investors with guidance, which it reaffirmed from its previous outlook. The company indicated it expects demand to improve by the second half of next year.
   
• Rigetti Computing (RGTI), a quantum computing firm, fell more than 8% this morning as investors continued to pare positions in tech. After a 150% gain at the best point of the year, the quantum computing basket has fallen by nearly 43%.
   
• Walt Disney (DIS) tumbled nearly 8% yesterday after quarterly revenue missed analysts' expectations amid struggles in its TV and movie businesses. Streaming and theme parks were both solid, re-emphasizing what analysts have said about these divisions leading future growth.
   
• Nike (NKE) surged 3% Thursday after an upgrade to Overweight from Wells Fargo. The old rating was Equal Weight. The firm says visibility into Nike's sales and margins "is finally improving." Shares fell 1.7% this morning ahead of the open.
   
• Eli Lilly (LLY) fell 1% this morning but is up 18% so far this month and Barron's reported it could be a candidate for a stock split. Health care is easily the best-performing sector this week.
   
• With Bitcoin (/BTC) at six-month lows today, shares of crypto-related firms also got sold off, including Coinbase (COIN), Circle Internet Group (CRCL), and Strategy (MSTR). Coinbase fell 5% and Strategy was off 6%.
   
• Recent tech selling has had an impact on market breadth. Just 37% of S&P 500 tech firms now trade above their 50-day moving average, the lowest since April.
   
• The S&P 500 Equal Weight Index (SPXEW), which weighs all components equally rather than by market capitalization, is having the best month relative to the SPX since March, another sign of rotation out of the most heavily capitalized names.
   
• The VIX jumped 14.2% yesterday and is up another 10% this morning.
   
• Treasuries rose today, possibly a sign of investors seeking perceived "safety" away from stocks.
   
• On the charts, 6,700 appears to be a technical level to watch, representing the 50-day moving average for the S&P 500 index. There hasn't been a close below the 50-day since April 30.

Washington update: With the government back open, learn what's top of the list in D.C. that might affect markets. Schwab's Washington: What to Watch Now features insight from my colleague Townsend, who noted that justices "seemed skeptical" of the Trump administration's arguments on tariffs last week, but adds the administration has other tools available to impose tariffs if it loses.

Retailers face challenging quarter: Find out how consumers' generally sour mood might affect earnings and guidance from some of the big-box stores next week in Schwab's new analysis, Q3 Retail Earnings Preview.

Charity and crypto: If you have gains in your cryptocurrency account, there can be potential tax benefits if you donate some to charity. However, some unique considerations can complicate the process. Learn more in Schwab's new Charitable Giving post.

The Nasdaq Composite ($COMP—candlestick) has now suffered four major selloffs in just over a month, with the latest a 2.29% drop yesterday to just above its 50-day moving average (blue line) of 22,811. Though the tech-heavy index bounced after its previous tests of the 50-day moving average in mid- and late October, gains weren't particularly strong following the November 6 stumble, suggesting the market may be losing steam.

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

November 17: No major earnings or data expected.
November 18: Expected earnings from Home Depot (HD), Medtronic (MDT), and Baidu (BIDU).
November 19: October housing starts and building permits and expected earnings from Nvidia (NVDA), Target (TGT), Lowe's (LOW), and TJX Companies (TJX).
November 20: October existing home sales, October leading indicators, and expected earnings from Walmart (WMT), Macy's (M), Intuit (INTU), and Gap (GAP).
November 21: Final November University of Michigan Consumer Sentiment and expected earnings from BJ's Wholesale Club (BJ).