A Day of Dramatic Reversals on Wall Street
Wall Street experienced another day of jarring volatility on Thursday, November 20, 2025, as a powerful morning rally completely evaporated, leaving major stock indexes deep in negative territory. The market's erratic behaviour highlights the deep-seated skittishness among investors following weeks of uncertainty and wild price swings.
The trading session began with a surge of optimism, with the S&P 500 soaring as much as 1.9%, putting it on track for its best performance since May. However, that early enthusiasm faded rapidly. By the close, the index had not only erased all its gains but had fallen sharply, ending the day down 1.6%. The Dow Jones Industrial Average dropped 386 points, or 0.8%, while the technology-heavy Nasdaq composite suffered the most, sinking 2.2%.
Nvidia and Crypto Assets Lead the Sell-Off
The most severe losses once again targeted the market's former high-flyers. Nvidia, cryptocurrencies, and other sectors that had enjoyed nearly unstoppable momentum were at the centre of the sell-off, as traders who had feared missing out on gains were now rushing for the exits.
Bitcoin tumbled below $87,000, a stark drop from its peak of nearly $125,000 just last month. The sharp decline in the flagship cryptocurrency dragged down companies tied to the digital asset industry. Robinhood Markets fell 10.1%, and Coinbase Global sank 7.4%.
All eyes were on chipmaker Nvidia, which reported a massive profit for the summer and provided a revenue forecast that easily surpassed analyst expectations. Initially, this seemed to calm fears of an AI bubble, sending its stock up 5% in early trading. UBS analysts, led by Timothy Arcuri, noted, "it is very hard to see how this stock does not keep moving higher from here," adding that "the AI infrastructure tide is still rising so fast that all boats will be lifted."
However, the optimism was short-lived. Nvidia's stock reversed course, ending the day with a 3% loss. As the most valuable company in the U.S. market, its performance has an outsized impact on the S&P 500. Other tech stars followed suit; Amazon swung from a 2.1% gain to a 2.5% loss, and Palantir Technologies plummeted from a 5.5% jump to a 5.8% decline.
Underlying Worries: AI Bubble and Interest Rates
The market's shaky performance stems from two primary concerns. First, investors are questioning whether the astronomical rise of Nvidia and other AI-focused stocks has created a speculative bubble. Despite Nvidia's strong numbers, a fundamental question remains: will the massive investment in AI chips and data centers actually generate the promised profits and productivity gains?
A recent Bank of America survey of global fund managers revealed a record percentage of investors believe companies are "overinvesting" in the sector.
The second major worry involves interest rates. A mixed U.S. jobs report offered some relief. Hiring in September was stronger than economists forecast, suggesting economic resilience. However, a slight worsening in the unemployment rate provided a potential reason for the Federal Reserve to consider cutting interest rates at its December meeting.
According to Seema Shah, chief global strategist at Principal Asset Management, financial markets initially dissected the data for encouraging signals. Traders now see a roughly 40% probability of a December rate cut, up from 30% a day earlier, as per CME Group data. The Fed's actions are critical because record stock prices have been partly fueled by expectations of continued rate cuts, which invigorate the economy.
Amid the tech wreck, Walmart emerged as a clear winner, rallying 6.5% after the retailer reported another standout quarter with strong sales and profits that exceeded Wall Street's expectations, as it continues to attract budget-conscious shoppers.
In the bond market, the yield on the 10-year Treasury eased to 4.09% from 4.13%. Overseas, stock markets in Europe and Asia fared better, with Japan's Nikkei 225 jumping 2.6% and South Korea's Kospi rising 1.9%.
