US close: Stocks hit five-week low as risk assets slide
18th Nov 2025 23:03
(Sharecast News) - Heightened fears about a bubble in the AI sector hammered US stocks again on Tuesday, while uncertainty regarding a potential interest rate cut in December continued to weigh on sentiment.
The Dow finished 1.1% lower at 46,091.74, its lowest since 16 October as it continues to retreat from last week's record closing high of 48,254.82, having now dropped 4.5% over the past four days.
Meanwhile, the S&P 500 slipped 0.8% to 6,617.32 and the Nasdaq Composite dropped 1.2% to 22,432.85, with both finishing at their lowest levels since 10 October.
"Four straight down days in the S&P, VIX pushing toward 25, and a tone shift that feels more psychological than mechanical-all signs that investors are finally blinking at the speed and scale of the AI capex boom," said Stephen Innes, managing partner at SPI Asset Management.
Nvidia's third-quarter earnings due after the close on Wednesday have been the main reason behind recent falls, according to analysts, with expectations already sky-high for the chip giant to impress the market.
However, sentiment towards the stock has shifted in recent weeks after Japan's Softbank and Peter Thiel's fund both sold big stakes last quarter, amid rising concerns about overstretch valuations in the AI and chip sectors.
Nevertheless, analysts suggest that Nvidia's recent slump - down 12% since over the past three weeks - could have been a result of profit-taking following the stock's impressive rally over the past year to a record high last month, as opposed to the company's fundamentals.
David Morrison, senior market analyst at Trade Nation, said Nvidia's earnings could be a pivotal moment for equity markets as we head towards year-end, given its leadership position in the AI trade, as well as current concerns around overvaluations and future returns on investment.
"Investors are worried, as can be seen by the size of the recent sell-off," Morrison said. "But for those of a strongly bearish persuasion, it may be worth considering that the recent pullback in Nvidia's stock price does give it some room to the upside, should tomorrow's release beat expectations. Revenues and earnings are important, but it's Nvidia's forward guidance which may prove key to how it performs after tomorrow's results."
Meanwhile, investors are scaling back risk appetite ahead of Thursday's September jobs data, which was delayed because of the government shutdown. Analysts are increasingly concerned that the expected lack of an October payrolls report may prompt the Federal Reserve to tread carefully when it comes to its next policy meeting on 9-10 December.
Elsewhere on the macroeconomic front, the latest weekly data from payroll processor ADP showed the private sector shed an average of 2,500 jobs per week in the four weeks to 1 November. Last week, ADP reported that the private sector shed an average of 11,250 jobs per week in the four weeks to 25 October.
Market movers
Nvidia shares dropped 3% as investors continued to scale back positions ahead of the the company's results, with other heavyweight tech stocks like Palantir, AMD and Broadcom also finishing in the red.
Home Depot fell 6% after the DIY chain cut its full-year outlook after weak consumer sentiment and a sluggish housing market weighed on third-quarter earnings. Like-for-like sales rose just 0.2%, well below forecasts for a 1.4% improvement, while earnings fell 1.3%.
Business software company Intuit edged higher after agreeing a multi-year contract worth more than $100m with OpenAI that will allow its customers to use its finance apps directly in ChatGPT.
Dow Jones - Risers
Merck & Co. Inc. (MRK) $96.75 3.84%
Verizon Communications Inc. (VZ) $41.43 1.15%
Dow Chemical Co. (DOW) $21.95 0.83%
Travelers Company Inc. (TRV) $288.09 0.82%
Procter & Gamble Co. (PG) $146.80 0.80%
Coca-Cola Co. (KO) $71.21 0.76%
Amgen Inc. (AMGN) $343.99 0.67%
Walt Disney Co. (DIS) $106.58 0.56%
3M Co. (MMM) $165.87 0.24%
Johnson & Johnson (JNJ) $199.88 0.21%
Dow Jones - Fallers
Home Depot Inc. (HD) $340.15 -6.02%
Microsoft Corp. (MSFT) $493.79 -2.70%
International Business Machines Corporation (CDI) (IBM) $291.10 -2.43%
Unitedhealth Group Inc. (UNH) $313.70 -2.17%
Walmart Inc. (WMT) $101.99 -1.52%
Salesforce.Com Inc. (CRM) $233.01 -1.49%
Visa Inc. (V) $321.08 -1.40%
Boeing Co. (BA) $190.25 -1.14%
Caterpillar Inc. (CAT) $549.45 -0.94%
Chevron Corp. (CVX) $153.92 -0.78%
S&P 500 - Risers
Medtronic Plc (MDT) $101.31 4.69%
Carmax Inc. (KMX) $33.49 4.14%
Valero Energy Corp. (VLO) $184.32 3.94%
Archer-Daniels-Midland Co. (ADM) $60.95 3.90%
Merck & Co. Inc. (MRK) $96.75 3.84%
Teleflex Inc. (TFX) $107.44 3.48%
Netflix Inc. (NFLX) $114.09 3.45%
Albemarle Corp. (ALB) $122.19 3.14%
PACCAR Inc. (PCAR) $97.00 3.03%
Quanta Services Inc. (PWR) $441.16 2.91%
S&P 500 - Fallers
Home Depot Inc. (HD) $340.15 -6.02%
CenturyLink Inc. (LUMN) $7.70 -5.46%
Advanced Micro Devices Inc. (AMD) $230.29 -4.25%
Helmerich & Payne Inc. (HP) $27.17 -3.80%
PVH Corp. (PVH) $74.15 -3.17%
Arista Networks Inc. (ANET) $124.32 -2.99%
Nvidia Corp. (NVDA) $181.36 -2.81%
Microsoft Corp. (MSFT) $493.79 -2.70%
Cadence Design Systems Inc. (CDNS) $303.21 -2.60%
Boston Scientific Corp. (BSX) $99.73 -2.50%
Nasdaq 100 - Risers
Netflix Inc. (NFLX) $114.09 3.45%
PACCAR Inc. (PCAR) $97.00 3.03%
Baidu Inc. (BIDU) $117.14 2.66%
Biogen Inc (BIIB) $168.83 2.52%
Wynn Resorts Ltd. (WYNN) $120.29 1.82%
Cognizant Technology Solutions Corp. (CTSH) $71.75 0.81%
Gen Digital Inc. (GEN) $26.34 0.77%
Amgen Inc. (AMGN) $343.99 0.67%
Workday, Inc. (WDAY) $225.64 0.31%
Mondelez International Inc. (MDLZ) $55.74 0.31%
Nasdaq 100 - Fallers
Nvidia Corp. (NVDA) $181.36 -2.81%
Microsoft Corp. (MSFT) $493.79 -2.70%
Cadence Design Systems Inc. (CDNS) $303.21 -2.60%
Paypal Holdings Inc (PYPL) $60.70 -1.92%
Costco Wholesale Corp. (COST) $895.08 -1.92%
Tesla Inc (TSLA) $401.25 -1.88%
Expedia Group Inc. (EXPE) $240.00 -1.70%
Microchip Technology Inc. (MCHP) $50.87 -1.61%
Asml Holdings N.V. (ASML) $1,004.06 -1.56%
Skyworks Solutions Inc. (SWKS) $62.32 -1.33%