US markets decline under the weight of concerns over tech valuations
Wall Street experienced a turbulent session on November 4, 2025, marked by a broad decline in major indices. The S&P 500 fell 1.17% to close at 6,771.55 points, while the Dow Jones slipped 0.53% to 47,085.24 points. This pullback comes after a strong rally since last May, highlighting ongoing concerns about valuations deemed excessive in the tech sector, especially for stocks related to artificial intelligence. Warnings from major financial institutions about a possible 10% to 20% downturn also weighed on investor sentiment.
Defensive sectors hold their own
Contrary to the general downward trend, several stocks have recorded significant gains, reflecting a shift towards sectors considered more defensive and capable of generating steady cash flows. Expeditors International, the Seattle-based logistics company, showcased an impressive performance with a 10.84% increase, driven by sustained demand in international transport and logistics despite tariff upheavals. Henry Schein, the distributor of dental and medical supplies, rose by 10.77%, benefiting from the structural stability of the healthcare sector. DuPont gained 8.85%, indicating a renewed interest in traditional industrial stocks. The utilities sector also appears attractive, with insurers such as Travelers Companies (+3.59%) and Progressive Corporation (+2.89%) gaining from the current environment. Asset managers like Apollo Global Management (+5.29%) have also capitalized on this preference for defensive stocks that offer regular returns.
The Collapse of the Tech and Cruise Sectors
The market downturn can largely be attributed to the sharp correction in the technology and artificial intelligence sectors. Palantir Technologies, despite posting solid third-quarter results, plunged 7.94%, hampered by concerns over its exorbitant valuation of 85 times future earnings— the highest in the entire S&P 500 index. This drop follows a 170% surge earlier this year, signaling a possible correction of speculative excesses. The semiconductor sector also faced a tough day, with Micron Technology plummeting 7.10%, Synopsys down 6.59%, and Intel retreating 6.25% amid ongoing doubts about the profitability of massive investments in AI capacities. The cruise sector experienced a true catastrophe with Norwegian Cruise Line Holdings collapsing by 15.28%, followed by Carnival which dropped 9.06%, due to disappointing forecasts and concerns about consumer demand. Zoetis, the animal health company, also saw a 13.78% drop after lowering its full-year revenue forecasts.
A Macroeconomic Context Influencing Investment Decisions
These market movements are occurring within a complex macroeconomic landscape where concerns are focused on the sustainability of growth and inflation. Warnings issued by the heads of Goldman Sachs and Morgan Stanley at the Global Financial Leaders' Summit in Hong Kong have accelerated the correction, with predictions of a possible 10 to 20% reduction in valuations over the next twelve to twenty-four months. The volatility index, or VIX, surged by 10.66% to 19 points, reflecting growing anxiety in the markets. This caution among investors echoes worrying signals from the labor market, where job openings have hit their lowest level in four and a half years according to Indeed.
Meanwhile, expectations for Federal Reserve interest rate cuts in December have softened, as comments from central bank officials suggest a possible pause. This combination of factors—profit-taking, doubts about returns on AI investments, consumer demand concerns, and political uncertainty related to the extension of the government shutdown—has prompted investors to reassess their portfolios and refocus on stocks generating tangible income rather than technological promises.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
