AI-driven market nervousness is palpable, with recent news flow providing ample fodder for bears.

Nvidia posts exceptional earnings, yet a dramatic Thursday sell-off raises questions: do investors still fear an AI bubble?

Despite some good news during the week from both corporate earnings reports and government economic data, U.S. equity markets finished the week lower. The sell-off appeared to be driven by worries about lofty stock valuations and concerns around whether AI will generate enough profits to justify the massive spending that companies have poured into supporting the developing technology. The Nasdaq Composite had the largest losses, while the Russell 2000 held up better but still lost ground. The S&P 500 Index finished about 4.4% lower than the record high it achieved in late October. A rebound on Friday helped ease the losses that the major benchmarks suffered earlier in the week.

AI-driven market nervousness is palpable, with recent news flow providing ample fodder for bears.

Doubts on a Fed December rate cut and concerns on the debt-fueled AI capex cycle drive rates higher and credit spreads wider

Meanwhile, quantitative easing might be making its comeback. Each week, the Syz investment team takes you through the last seven days in seven charts.

U.S. stocks ended the week mixed. The Dow and S&P 500 saw slight gains, while the Nasdaq, S&P MidCap 400, and Russell 2000 declined. Through most of the week, markets fell as investors rotated out of high-growth and AI-related stocks due to valuation concerns. A volatile Friday helped some indexes recover. The longest U.S. government shutdown ended Wednesday after President Trump signed a temporary funding bill. Although this removed a key market headwind, stocks still dropped Thursday as uncertainty remained about the return to normal operations. Economic data releases became a focal point, with the BLS delaying some reports but confirming the September jobs report will come out on November 20. Comments from multiple Fed officials signaled caution and a preference to keep policy restrictive due to lingering inflation risks.

Flash note

The US government shutdown is casting uncertainties on growth and US rates outlooks, weighing on bond market performances

Global equity markets turned lower as investors shifted to a risk-off stance, ending a recent winning streak.