AI Sparks Volatile Week for Stocks:
Wall Street grappled with increased volatility last week as investors remained focused on artificial intelligence (AI) stock valuations.
The S&P 500 Index fell 1.95%, while the Nasdaq Composite Index declined 2.74%. The Dow Jones Industrial Average slid 1.91%. The MSCI EAFE Index, which tracks developed overseas stock markets, slumped 3.25%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 11/14/25 = 0)
AI Valuation Worries
Stocks slid over the first half of the week as anticipation continued to build for Q3 results from one of the largest AI megacap tech stocks, due out midweek.
While the decline was led by megacap tech stocks, which typically drag down both the Nasdaq and S&P 500, the Dow Industrials also fell. With the government still playing catch-up on a backlog of economic reports following the shutdown, investors kept a close eye on big consumer-related stocks for insights into the economy.3
Then midweek, all three major averages rebounded, with the S&P snapping a four-day losing streak. Sentiment improved as investors turned more positive about another AI firm’s quarterly report due out after Wednesday’s closing bell.4
That firm’s results helped boost stocks after the opening bell on Thursday, but prices retreated quickly as investor anxiety built over whether the Fed would adjust rates next month. The Fed’s October meeting minutes revealed divisions among the Committee’s voting members. Additionally, the Labor Department’s September jobs report painted a mixed employment picture, which might complicate the Fed’s decision.5
Stocks rebounded on Friday after New York Fed President John Williams seemed to reassure investors that a rate adjustment at the Fed’s December meeting was still a possibility. The bounce was jagged, as the rebound had to battle through disappointing economic data on consumer sentiment and manufacturing activity.6
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
More Jobs, but Higher Jobless Rate
The delayed September jobs report came out last week, and showed employers added 119,000 jobs—the strongest monthly gain since April and a rebound from August’s loss of 4,000 jobs (which was later revised to a 22,000 gain). The jobs report was among the first post-shutdown reports to be published by the Labor Department.
The unemployment rate in September rose to 4.4%, higher than the 4.3% economists expected. It was the highest number in four years.
This was the Labor Department’s last monthly employment report before the Federal Reserve’s next meeting on December 9-10.7
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1WSJ.com, November 21, 2025
2Investing.com, November 21, 2025
3CNBC.com, November 18, 2025
4CNBC.com, November 19, 2025
5WSJ.com, November 20, 2025
6CNBC.com, November 21, 2025
7WSJ.com, November 20, 2025
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