U.S. stocks fell sharply on Thursday as major artificial intelligence–linked companies came under renewed pressure amid growing concerns over their lofty valuations.
The Dow Jones Industrial Average dropped 398.70 points, or 0.84%, to close at 46,912.30. The S&P 500 slid 1.12% to 6,720.32, while the Nasdaq Composite tumbled 1.9% to 23,053.99. The Nasdaq 100 has now lost over 2% since last Friday, heading for its worst week since early April. Heavyweights including Nvidia, Microsoft, Palantir Technologies, Broadcom, and Advanced Micro Devices were among the biggest drags.
AI-related stocks continued their choppy trend in November. Qualcomm fell nearly 4% despite beating quarterly earnings estimates, after warning it could lose future Apple business. AMD, which rallied on Wednesday, plunged 7%, while Palantir and Oracle dropped nearly 7% and 3%, respectively. Shares of Nvidia and Meta Platforms also declined.
“Valuations have been so stretched and priced for perfection that we’re now seeing a clear divide between companies beating and raising guidance versus those only meeting expectations,” said Mike Mussio, president at FBB Capital Partners. “That’s why some names are up double digits on earnings while others are down double digits — there’s very little middle ground.”
The market’s retreat was compounded by rising worries over the labor market. October layoff announcements surged to more than 153,000, nearly three times September’s level and 175% higher than a year earlier, according to Challenger, Gray & Christmas. It marks the worst October for job cuts in 22 years, putting 2025 on track to be the weakest year for employment since 2009.
The data added to mounting concerns about the economy, especially as the U.S. government shutdown—now over a month old and the longest in history—has delayed key economic reports.
“We’re only seeing fragments of economic data not tied to government sources, and it’s not very encouraging,” Mussio said. Still, he added that a post-shutdown recovery could support a year-end rally, provided consumer spending holds up through the holidays.
For the week, all three major indexes remain deep in the red: the Dow is down 1.4%, the S&P 500 has lost 1.8%, and the Nasdaq has slumped 2.8%.
Investors were also focused on Washington, where the Supreme Court heard arguments over the Trump-era tariffs. The justices’ skeptical questioning raised expectations that parts of the trade policy could be struck down, adding another layer of uncertainty for markets.
