The Nasdaq Composite logged its worst week since early April, dropping more than 3%, as a sharp selloff in AI-linked names erased roughly $800 billion in market cap across eight major players, including $NVDA (+0,31%), $META (+1,83%) , $PLTR (+0,59%) , and $ORCL (-4,41%). For the week, Oracle and $AMD (-0,01%) fell about 9%, Nvidia slid 7%, and $AVGO (-1,84%) lost 6%.
On Friday, November 7, the Nasdaq Composite was the only major index to finish lower, closing down 0.3%. The S&P 500 clawed back late to end up 0.13% but still fell more than 1% for the week. The Dow Jones Industrial Average rose 0.16% on the day and, like the S&P 500, declined more than 1% for the week.
Nationwide’s chief investment officer Mark Hackett said the pullback in AI stocks looks more like the clearing of excessive hype than a hit to fundamentals, describing it as a stress test of the AI narrative amid concerns about slowing growth and stretched valuations.
Worries about lofty Silicon Valley valuations collided with signs of a cooling U.S. labor market and weakening consumer confidence. The University of Michigan’s sentiment gauge
dropped to a three-year low in November, while Challenger, Gray & Christmas reported the highest October layoff tally in 22 years. Market anxiety has been compounded by the longest U.S. federal government shutdown on record at 38 days, and headlines about job cuts at $Amon, $PARA (+0,37%) , and $TGT (+4,78%) added pressure.
Sentiment was further weighed by reports that Michael Burry bet against leaders of the AI trade such as Nvidia and Palantir, along with cautious commentary from Wall Street. $GS (-0,52%) CEO David Solomon said equities could correct 10–20% over the next 12–24 months, while Morgan Stanley (MS) CEO Ted Pick warned investors to be prepared for a 10–15% pullback even without a macro shock.
Late Friday brought some relief as stocks firmed on hopes Congress is edging toward a deal to end the shutdown. Democrats proposed short-term government funding in exchange for a one-year extension of Obamacare-related tax credits. Republicans rejected the offer, but the fact that both sides exchanged proposals was taken as a constructive step.
The tech and AI selloff appears to be a valuation reset rather than a fundamental break, with macro softness and policy headlines acting as near-term catalysts.