Name: Biggest single-day U.S. stock market swing since April
Uploaded: 2025-11-21T10:35:10.595Z
Duration: 5 min 48 s
Description: Fading hopes for a December rate cut by the Federal Reserve and fresh concerns over AI valuations spark a sell-off on Wall Street with U.S. indices posting their biggest single-day reversal since April.

Fading hopes for a December rate cut by the Federal Reserve and fresh concerns over AI valuations spark a sell-off on Wall Street with U.S. indices posting their biggest single-day reversal since April.

Wall Street

The U.S. stock market underwent its most significant single-day swing since April, primarily due to volatility in technology stocks. Nvidia's strong earnings report failed to address broader concerns about future profitability in the sector, leading to a sharp reversal in market sentiment.

Analysts highlighted ongoing uncertainties, including questions about company valuations, the impact of declining capital expenditures, and mixed economic signals such as a recent jobs report. Additional factors influencing market sentiment included liquidity issues related to Bitcoin's decline, political uncertainty, and doubts about future Federal Reserve rate cuts.

Biggest single-day U.S. stock market swing since April

Well, I have to hand it to you. Oh don't hand anything to me. I trust me It is it is a begrudging handing it to you But I can't deny we were sitting here yesterday at this time and you very clearly made the point that looking at Nvidia's numbers Yeah, they were great for Nvidia but what did we learn in those numbers that justified the Massive rally that we saw and a few hours later. Lo and behold a stunning reversal I will go over my point one more time. Thank you for that. I appreciate that. Look the point I was making is Nvidia is doing great, you know, you know, we know that but but it doesn't tell any of you out there Anything about all those burning questions that we have about the X Nvidia environment as well It doesn't actually tell us much more about Nvidia. We knew Nvidia was knocking the ball out the park We know they had the moat for now. We know they have 75% margins on their chips We know it's fantastic, but it kind of endorsed the story. So you have a loving video you don't for its own merits It didn't tell me anything about the revenues that can be generated from the hyperscales It didn't tell me anything about the decline in spending that capex that the hyperscalers are going to have next year And how that was going to affect the revenue expectations and then when they're going to generate net income for me It didn't tell me that every company out there that's investing heavily in AI is going to generate profits from that investment as well So if you had valuation concerns beforehand, you really really had them More so on the back of video because in fact if anything if you look at the counterfactual, okay Nvidia is doing great people are buying more chips, but we still don't have the answer So they're buying more but we don't have the answer here I want to just come up from a different point of view and I've just thought of this as I was speaking to you about Valuations, there are two types of first of all, let's assume is the market overvalued. Well, look you lot over there say yes You got over there say no. Okay, so let's just go with the overvalued camp for now. Bear with me on this one I know some of you think it's not overvalued if it is overvalued. There are two types of companies that are overvalued there are the ones that are great and they're gonna be here and they're gonna generate vast amounts of cash and we know they're Gonna hang around and you know, we're not worried about them But they're just highly priced, you know The kind of big tech names or the ones that generate massive free cash flow which they compile back into amongst other things buying equity So you've got the overvalued companies that are brilliant and then you've got the over camp of value companies that are rubbish And my problem is I don't think we're having enough of a wheat versus chaff Split in those at the moment So you've got the overvalued companies that are great the overvalued companies that I'm just never gonna make the kind of profits that they're promising They're just not gonna be there so-called pets calm. Look for instance, I Think GoPro was a great device. I think the Fitbit was a great device I think I alternative meat great idea alternative milks great idea a card Oh the shopping company UK great idea, but none of these companies has proven a sustainable profit path Then they didn't so some of them are gone. Some of them are still hanging on in there as well So when you've got companies that haven't got a proven path to profitability and are still massively overvalued That's where the problem comes in a month very clearly It's early days when it comes to this technology and investors are very humble about saying it's not clear who the winners and losers are Gonna be so we're just gonna cast the net wide right now I think the trouble is that even if you believe that we are in bubble territory when you look at valuations across the board in The tech space something has to pop the bubble and you don't necessarily Want to cash out too early because as we've seen so many times this year The rally can run on and on and I would say right now when you look at the market What was the catalyst for the sell-off that we've seen was there a distinct catalyst? Maybe the fact that we've seen this massive plunge in Bitcoin and that's impacted the liquidity of many shareholders that have cross Stakes in a lot of these tech companies and in Bitcoin But I think just because you believe we're in bubble territory doesn't necessarily mean it's time to sell your holdings or to short the market And maybe yesterday what we saw that early rally was short covering because the numbers were so good But not actually a change in sentiment. I do not call the market. I see what I see And I'm not saying the market's gonna go down from here I'm not saying the market's gonna go up from here But if you thought the market was great value when the Nasdaq was up 2% you really think it's good value now So presumably you're back in unless you have liquidity problems Unless you have other issues as well And that's the other point a lot of the dangers in the market the reason why the Bears make such brilliant reading You know bears make sense balls make money The reason why they make so much sense is because there are so many other factors to worry about You can look at consumer confidence on both sides of Atlantic You can look at the K shape recovery something you've talked a lot about you can look at the travails that President Trump has having in the polls and indeed on the most recent elections with Getting across his message that we don't have inflation in the States But then he takes off the tariffs on bananas and a whole host of other products So there clearly is inflation Americans are telling me there's inflation. They can fill that inflation So there's macro issues and then we came to that jobs report Which I don't blame our team by the way for saying was a strong report But it wasn't it was a very mixed report as well headline figure much bigger expected But also unemployment rate up higher as well So I think it was nuanced and that clouded that December rate decision and then that brings us back to the valuations if we're really worried About the debt profile and the credit profile and the leverage profile of both investors and the companies Then we're really worried if rates aren't going down Yeah I think that's absolutely key and when you think about whether now is a good entry point even with the Nasdaq now down more than 2% yesterday you have to ask what's gonna be the catalyst for further gains this year if we've got a Federal Reserve that now looks Very it looks very unclear whether they are gonna cut in December and video earnings are behind us So what's gonna be the positive catalyst that drives markets from here and on that point? I would just throw out there to your point about President Trump and the pressure. He's now under from a support perspective from voters I wouldn't underestimate the administration's ability to come up with creative solutions to bolster confidence. We've seen it time and time again this year I don't know what that would look like but we have seen this administration very keen to intervene

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