NEW YORK — November 6, 2025 — Wall Street ended Thursday sharply lower as tech stocks plunged and investor confidence weakened amid growing fears of overvaluation and economic slowdown. The Dow Jones Industrial Average dropped 399 points, while the Nasdaq Composite fell 1.9%, leading losses across major indexes.
Tech Stocks Lead Market Declines
The Nasdaq’s sharp retreat was driven by a broad sell-off in high-growth technology shares. Major players including Nvidia, Palantir, and Advanced Micro Devices (AMD) recorded significant declines, extending a week of volatility.
AMD slid 7.27%, Palantir fell 6.84%, and Nvidia lost 3.65%, signaling mounting investor anxiety over inflated valuations linked to the artificial intelligence boom. “Big tech stocks have their hands on their knees, gulping for air — it’s a natural correction,” said Robert Edwards, Chief Investment Officer at Edwards Asset Management.
Market Fear Index Spikes Amid Uncertainty
Wall Street’s VIX volatility index surged 9%, reflecting growing investor nervousness. CNN’s Fear and Greed Index hovered between “fear” and “extreme fear” levels, underscoring fragile market sentiment.
“After months of relentless growth, investors are beginning to reassess risk exposure,” said Ulrike Hoffmann-Burchardi, Global Head of Equities at UBS Global Wealth Management. “Valuations have stretched too far, too fast, and the market is now taking a breather.”
Investors Rush to Safety in U.S. Bonds
Amid market turbulence, investors shifted capital into U.S. Treasury bonds, pushing yields lower. The move followed new labor data showing a spike in layoff announcements — the highest October total since 2003, according to Challenger, Gray & Christmas.
Bond analysts noted that weakening labor indicators strengthen arguments for potential Federal Reserve interest rate cuts in early 2026. “Yields remain attractive, and quality fixed income offers both income and stability in a slowing economy,” Hoffmann-Burchardi said.
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Corporate Layoffs Add to Economic Concerns
Recent layoff announcements from Amazon, Target, and several AI-focused companies have amplified fears of a cooling job market. Economists warn that corporate downsizing could dampen consumer confidence, further weighing on equities.
JPMorgan Chase CEO Jamie Dimon acknowledged the uncertainty, saying, “There’s a lot of turbulence out there. Hopefully, we’ll have a soft landing, but it may not happen. We just don’t know.”
Supreme Court Tariff Case Adds Legal Pressure
Wall Street also watched closely as the U.S. Supreme Court heard arguments on the legality of President Donald Trump’s expansive global tariff program. The policy, based on emergency powers, has generated billions in federal revenue but faces mounting constitutional scrutiny.
Analysts warned that a ruling against the tariffs could create volatility if the government is required to refund billions to importers. “The decision could ripple through trade, inflation, and bond markets,” said Dr. Elaine Porter, Senior Economist at Columbia Business School.
Buffett Indicator Warns of Overvaluation
Market veterans highlighted Warren Buffett’s market indicator, which compares total stock market value to GDP. The ratio reached a record 217%, suggesting the market remains significantly overvalued.
“The S&P 500 today is at historically extreme valuations,” noted Torsten Slok, Chief Economist at Apollo Global Management. “The risk is that future earnings will not justify current prices.”
Tech Sector Fatigue and Rising Volatility
The recent correction marks a pause in a six-month rally fueled by AI-driven optimism. While corporate earnings have largely beaten expectations, several tech companies saw share prices drop despite strong performance, reflecting elevated investor expectations.
Shares of Duolingo plunged 25.49%, its worst day on record, after delivering a mixed earnings outlook. Analysts said the selloff highlights how quickly markets are penalizing even minor disappointments.
Bitcoin Weakens as Risk Appetite Declines
Adding to the risk-off sentiment, Bitcoin fell 3% to around $100,650, continuing its retreat from the $126,000 record high set in early October. Analysts view the decline as part of a broader capital shift away from speculative assets toward safer investments.
“Investors are de-risking across the board,” said Daniel Chen, a market strategist at eToro. “From crypto to tech, the market is demanding stronger fundamentals before re-entering high-volatility sectors.”
