Risk Sentiment Turns Cautious 14/11/2025

HOT stories for today

Market wrap:

• U.S. equities tumbled Thursday, with all major benchmarks, including the small-cap Russell 2000, logging their steepest one-day drop since Oct. 10. The Dow Jones Industrial Average sank roughly 800 points, or 1.7%, while the S&P 500 slid 1.7% and the Nasdaq retreated 2.3%. Strategists pointed to a mix of catalysts, but shifting expectations around the Federal Reserve’s rate-cut trajectory appeared to be the dominant driver. Megacap tech led the decline: Nvidia dropped 3.6%, Broadcom fell 4.3% and Alphabet slid 2.8%.
• Concerns over the durability of the artificial-intelligence trade intensified after Oracle’s sharp selloff earlier in the week, which renewed fears about stretched tech valuations, rising debt financing, and soaring AI capital-expenditure plans. The shutdown’s resolution, ending the longest government closure on record Wednesday night, was expected to restore the flow of delayed economic data. Instead, it has fueled fresh uncertainty about the outlook. Meanwhile, Bitcoin extended its slump to a six-month low, deepening its bear-market slide as long-term holders ramped up selling.

AI Valuations Fuel Backstop Concerns

• As expectations for a December rate cut diminish, investors are increasingly focused on another developing risk: inflated AI valuations. A report from the Center for Public Enterprise warns that if the AI buildout cools and profits contract, policymakers may be forced to contend with a wave of distressed energy and data-center assets tied to the sector’s growth. The U.S. government has already become deeply intertwined with the AI boom through tax incentives, permitting fast-tracks, and efforts to expand power generation. Big Tech is gearing up to spend trillions on AI infrastructure over the next several years, financed through corporate bonds and private-credit structures, with analysts noting that additional federal support cannot be ruled out.
• The report cautions that an overbuild could hit hardest in data-center hubs such as northern Virginia, Texas, and the Midwest, posing a budgetary threat to utilities whose power-procurement and rate decisions now rely heavily on sustained AI demand. With AI evolving into both an economic engine and a national-security priority, strategists warn that a downturn could raise uncomfortable questions about whether the sector has become “too big to fail.”

Stocks on the move:

• StubHub (STUB): Shares tumbled 18% after the CEO said on a conference call that the company will not guide for the current quarter. StubHub reported a net loss of $1.33 billion due to a one-time stock-based compensation charge, though second-quarter revenue still came in above estimates in its first earnings report since its September IPO.
• Applied Materials (AMAT): The stock slipped about 4% despite better-than-expected fourth-quarter results. Adjusted earnings were $2.17 per share on revenue of $6.8 billion, topping LSEG forecasts of $2.09 per share and $6.67 billion. The company projected stronger demand in the second half of 2026 but cautioned that spending from China could soften.
• Figure Technology (FIG): Shares rose 6% in after-hours trading after the stablecoin issuer posted third-quarter earnings and revenue that exceeded Wall Street expectations, based on LSEG consensus estimates.

Watchlist: AMAT, TSLA, NVDA, ORCL, AMD, MU, AAPL, RBLX, FIG

Key Economic Events Today:

EST time

09:20 am: USD FOMC Member Bostic Speaks
10:05 am: USD FOMC Member Schmid Speaks
02:30 pm: USD FOMC Member Logan Speaks


Earnings

BMO (Before Market Open): Spire Inc. (SR), Legence Corp. (LGN), RLX Technology (RLX)



The TEFS Analyst team wishes you a successful day!