U.S. stocks slide as tech weakness and bitcoin’s drop fuel risk aversion amid fading Fed rate-cut hopes - IcoHolder.
U.S. stocks fell again on Tuesday as pressure on major tech names intensified and bitcoin briefly dipped under $90,000, signaling a broader pullback in investor risk appetite. The Dow Jones Industrial Average dropped 466 points, or 1%, while the S&P 500 slipped another 1%, putting it on track for a fourth consecutive losing session — its longest decline since August. The Nasdaq Composite fell 1.5%.
Leading AI chipmaker Nvidia lost 2%, while Amazon and Microsoft also weakened. Nvidia has now fallen 10% in November ahead of its third-quarter earnings report due Wednesday, a moment investors see as key to resolving debate over whether the AI-driven market surge can continue. Concerns about stretched valuations, heavy debt issuance by Big Tech, and the durability of AI demand have weighed heavily on sentiment.
Private credit lender Blue Owl, a major financier of AI data center projects, continued to slide after a 6% drop in the prior session. Earlier this month, the company announced it would merge two private credit funds — one private and one publicly traded — leaving investors in the private fund facing steep losses and locked redemptions until next year.
Alphabet CEO Sundar Pichai told the BBC that aspects of the current AI boom show signs of “irrationality,” warning that no company is immune if the bubble bursts.
Bitcoin sank below $90,000 on Tuesday, extending a decline from its early-October record of $126,000. Because many tech-focused investors also hold significant crypto positions, the slide has raised fears of a larger spillover into equities. Bitcoin later recovered slightly to trade just above $91,000.
Home Depot shares fell after the company posted an earnings miss and cut its full-year outlook, adding pressure to the consumer and retail sectors.
All three major U.S. indexes closed lower in the prior session, with the Dow losing more than 550 points and both the S&P 500 and Nasdaq falling around 0.9%. The Nasdaq is now at risk of ending its seven-month winning streak, while the S&P 500 is down 2.5% in November after six straight months of gains.
Natixis strategist Garrett Melson noted that the market’s tone toward AI has flipped sharply from rewarding heavy capital spending to questioning future returns. Combined with crowded investor positioning, he said, the environment is primed for rapid de-risking and a broader reset in market narratives.
Adding to investor unease is growing doubt that the Federal Reserve will deliver a third rate cut in December. Futures markets now assign only about a 50% chance of a cut, down from more than 90% a month ago. With valuations stretched, investors are counting on easier monetary policy to sustain momentum. Markets now await Wednesday’s Fed meeting minutes and Thursday’s release of September nonfarm payrolls for further direction.
