Stock Market Today - Nasdaq Sinks 4% Weekly as AI Stocks Crumble and U.S. Shutdown Deepens

Wall Street Slides as Tech Crumbles and Shutdown Deepens

Markets closed the week sharply lower as the Nasdaq Composite (NASDAQ:IXIC) sank 1.74% to 22,652.26, suffering its worst week since April. The S&P 500 (INDEXSP:.INX) fell 1.01% to 6,652.30, slipping beneath its 50-day moving average for the first time in over six months. The Dow Jones Industrial Average (INDEXDJX:.DJI) declined 0.49% to 46,683.69, while the Russell 2000 (INDEXRUSSELL:RUT) matched the broader selloff with a 1.01% loss. The VIX (INDEXCBOE:VIX) jumped nearly 10% to 21.40, reflecting a clear risk-off tone across markets as investors digested surging layoffs, record-low sentiment, and a paralyzed federal government.

AI Sector Loses Grip as Valuations Face Reckoning

Artificial intelligence leaders once fueling 2025’s rally turned into its heaviest drag. Nvidia (NASDAQ:NVDA) dropped another 3% Friday, down 10% for the week. Advanced Micro Devices (NASDAQ:AMD) and Palantir Technologies (NYSE:PLTR) each extended steep declines—PLTR down 14% weekly, AMD sliding 9%. Broadcom (NASDAQ:AVGO) fell 7% as the AI trade unwound globally, echoing weakness in SoftBank (TYO:9984) and Samsung Electronics (KRX:005930). Analysts flagged overheated valuations after months of relentless inflows, while investors awaited Nvidia’s upcoming earnings as a potential test of the entire AI narrative.

Elon Musk Secures $1 Trillion Pay Package Amid Tesla Pullback

Tesla (NASDAQ:TSLA) shareholders approved CEO Elon Musk’s record $1 trillion compensation deal with 75% support, granting him 12 tranches of stock tied to market-cap milestones up to $2 trillion. Yet TSLA fell 3.7% Friday to $429.31, wiping out earlier gains. The plan could raise Musk’s ownership to 25%, or 423 million additional shares. While Tesla remains up 10.4% YTD, investor reaction signaled unease over dilution and capital focus as the firm doubles down on robotics and xAI integration.

Consumer Sentiment Collapses to Near-Record Lows

The University of Michigan Consumer Sentiment Index dropped to 50.3, just above its all-time low, down 6.2% from October and nearly 30% year-over-year. The reading mirrored 2022’s inflation-era lows as Americans grappled with the economic fallout of a 38-day government shutdown. Economists had projected 53.0, but confidence cratered instead. The report compounded Thursday’s Challenger, Gray & Christmas data showing October layoffs at their highest in 22 years, marking 2025 as the worst year for job cuts since 2009.

Government Shutdown Stalls Economic Data and Air Travel

The record federal funding lapse crippled vital agencies. With the Bureau of Labor Statistics closed, the October nonfarm payrolls report—expected to show a 60,000 job drop and unemployment rising to 4.5%—was never released. Over 700 U.S. flights were canceled Friday as air-traffic controllers continued working unpaid under staffing shortages. Transportation Secretary Sean Duffy ordered a 10% reduction in flights across 40 major airports, affecting up to 4,000 daily. The Senate’s pending vote on a stopgap bill could temporarily reopen operations, but market stress signals the damage is already systemic.

Airbnb, Affirm, and Peloton Outperform on Earnings Beats

Earnings provided rare bright spots. Airbnb (NASDAQ:ABNB) climbed 4% pre-market after beating revenue expectations and raising its Q4 outlook to $2.66–$2.72 billion. Affirm (NASDAQ:AFRM) surged over 10% as Q3 revenue hit $933 million versus forecasts of $883 million, delivering EPS of $0.23. Peloton (NASDAQ:PTON) jumped 3.3% to $6.94 after a surprise $13.9 million profit and stronger-than-expected holiday guidance, lifting full-year EBITDA targets to $425–$475 million. By contrast, Opendoor Technologies (NASDAQ:OPEN) collapsed over 23% after sales plunged 30%, underscoring widening divides between digital and physical-asset sectors.

Gaming Sector Hit as Take-Two Delays Grand Theft Auto VI Again

Take-Two Interactive (NASDAQ:TTWO) tumbled 7% after confirming another delay to “Grand Theft Auto VI,” now scheduled for November 2026 instead of May. Despite Q2 bookings of $1.96 billion—above guidance—investors punished the setback, trimming TTWO’s 2025 gains from 40% to under 34%. The delay reignited concerns about production bottlenecks across the gaming industry as firms struggle to meet soaring development costs and investor expectations.

Crypto Market Retreats as Bitcoin Dips Below $100,000

Bitcoin (BTC-USD) briefly slipped under $100,000 before recovering to $100,766.01, marking a 20% pullback from its October record $126,000. The weakness spread to crypto-linked equities: Coinbase (NASDAQ:COIN) fell 2.35% to $288.29, while MicroStrategy (NASDAQ:MSTR) dropped 3.94% to $227.86. Outflows from BlackRock’s iShares Bitcoin Trust (IBIT) and Grayscale Bitcoin Trust (GBTC) deepened losses, each shedding nearly 3% in the prior session. Analysts tied the slump to shrinking Fed-cut odds and investor caution amid the data blackout caused by the shutdown.

Commodities Hold Firm as Investors Hedge Risk

Safe-havens steadied markets. Gold (COMEX:GC=F) inched 0.19% higher to $3,998.70 per ounce, reclaiming the $4,000 threshold as traders priced in an eventual Fed cut. Crude oil (NYMEX:CL=F) rose 0.32% to $59.62 per barrel, while Brent (ICE:BRN=F) hovered near $63.53. The U.S. Dollar Index (DXY) eased 0.21% to 99.52, pressured by softer Treasury yields. The 10-year yield slipped 17 bps to 4.08%, extending a three-week slide that hints at investor rotation back toward fixed income after months of equity dominance.

Fed Officials Signal Patience Before Next Cut

Federal Reserve Vice Chair Philip Jefferson reiterated that “it makes sense to proceed slowly,” leaving a December cut uncertain. New York Fed President John Williams suggested the central bank could soon expand its $6.6 trillion balance sheet again to maintain liquidity. Markets now price a 58% probability of a December cut, down from 74% a week earlier, as policymakers weigh a deteriorating labor market against inflation risks.

Market Outlook: Short-Term Pressure, Long-Term Rotation

With the S&P 500 down 2% week-to-date and the Nasdaq off 4%, investor sentiment has turned decisively defensive. Heavy layoffs, shrinking confidence, and AI valuation fears suggest more near-term volatility. Yet structural strength in corporate earnings, Fed easing prospects, and post-shutdown normalization could stabilize risk assets into December. Based on current breadth, TradingNews.com assigns a Hold outlook for the S&P 500, a Cautious Sell for the Nasdaq, and a Neutral stance for the Dow Jones until clearer economic data resumes. Tech remains vulnerable, while energy and precious-metals sectors may continue to outperform as capital rotates toward safety.

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