Wall Street on a Roller Coaster: Disappointment Over AI Unsettles Markets

Walmart Triumphs as Retail Gains Momentum

Amid this storm, Walmart emerged as the standout winner of the session, with a remarkable 6.46% surge, making it the best performer in the S&P 500. The retail giant not only exceeded market expectations in terms of profits and revenues but also raised its growth outlook for the full fiscal year, anticipating a 5.1% increase in annual sales. This performance brings some shine back to a sector long overshadowed by tech stories and highlights a fundamental trend: American consumers, weakened by persistent inflation, are turning to value retailers where they can manage their spending. Walmart's e-commerce growth, which jumped 27%, also demonstrates a successful adaptation to changing shopping behaviors. This success also benefited defensive sectors, with Solventum gaining 2.85% and GE HealthCare rising by 3.37%. These movements confirm a capital rotation towards segments offering more reassuring fundamentals and more predictable returns, a dynamic that could intensify if concerns about AI and its actual returns persist.

The tech sector and AI-related stocks in turmoil

The downside has been remarkably harsh in the tech sector and, more broadly, for stocks exposed to the rush toward artificial intelligence. Advanced Micro Devices dropped 7.84%, while Palo Alto Networks plunged 7.42%, reflecting market concerns about the sustainability of massive investments in data infrastructure. Moderna, the biotech company, saw a dramatic fall of 7.53%, penalized for lowering its 2025 revenue forecasts. Beyond the tech sector alone, pessimistic outlooks have affected cyclical stocks: Micron Technology tumbled 10.87%, while Jacobs Solutions, leading the drop, saw a decline of 10.95%. These setbacks reflect a broader concern: What if the enormous capital expenditures on chips, data centers, and algorithms don't translate into the promised productivity gains and revenue increases? September employment data, showing 119,000 net new jobs, also raised questions about the true state of the labor market, with unemployment climbing to 4.4%, the highest since 2021. This ambiguity tempered the initial optimism surrounding Nvidia, whose solid results could not offset the broader erosion of confidence in the sector.

Central Banks at the Heart of Market Anxiety as Bitcoin Stumbles

The release of the Federal Reserve's October minutes was the catalyst for a new bout of pessimism, revealing a deep division within the monetary policy committee on whether to cut rates again in December. Contrary to the market's high expectations a few weeks ago, the chances of a quarter-point cut in December have plunged to around 30-40%, according to the most recent data exchanged. This clarification has weighed on the entire risk asset class, including cryptocurrencies: Bitcoin, which had reached highs exceeding $125,000 in October, plummeted to less than $87,000, wiping out gains made in 2025. This correction, about 30%, reflects both a technical unwinding of leveraged positions and a deeper questioning of the underlying macroeconomic thesis. Robinhood Markets, a trading platform heavily exposed to cryptocurrency volatility and speculative movements, dropped significantly, while Coinbase lost ground amid the sector's ongoing volatility.
This confluence of factors, including the persistence of inflation above the Fed's 2% targets, growing doubts about AI investment returns, and political uncertainty, has created an environment where caution prevails. For investors, the message is clear: after nearly three years of continuous growth in tech assets, a period of consolidation, or even a deeper correction, cannot be ruled out.