US stock markets experienced a sharp downturn on Tuesday, November 4, 2025, as investors sold off shares amid growing concerns over high tech valuations and warnings from top bank executives. The sell-off wiped out an estimated $730 billion from US equities in a single trading session. All three major US stock indexes—the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite—closed significantly lower, with tech stocks bearing the brunt of the decline. ##^[1][2][3]# Tech Valuation Fears Drive Sell-Off A primary driver of the market's tumble was widespread anxiety about the soaring valuations of artificial intelligence (AI) companies. Wall Street analysts and bank CEOs have increasingly questioned whether corporate earnings can justify the current high stock prices, particularly within the tech sector. Thi^[4][5][6]s skepticism fueled profit-taking after a strong, tech-led rally throughout 2025. To^[4][5]p financial leaders voiced their concerns, contributing to the market's unease. Jamie Dimon, chairman and CEO of JPMorgan Chase, previously warned in October that a significant stock market correction was a heightened risk within the next six months to two years. He ^[1][7]stated he was "far more worried than others" about such a correction, giving it a "higher probability" than what the market was pricing in. CEO^[7]s from Morgan Stanley and Goldman Sachs also stoked fears of a potential market bubble, particularly after the S&P 500 reached a series of all-time highs, largely powered by the AI boom. Se^[1][6]veral prominent tech stocks saw steep declines. Palantir Technologies, an AI-powered data firm, slid 8.0% despite reporting better-than-expected fourth-quarter revenue forecasts. Tes^[1][3]la shares fell over 3% after Norway's sovereign wealth fund, a major shareholder, announced it would vote against CEO Elon Musk's $1 trillion pay package. Eve^[4]n companies like Uber and Spotify saw their shares slip following their quarterly results, indicating investors' demand for even higher growth from large-cap companies. The^[4][1] Philadelphia SE Semiconductor index, a key indicator for chipmakers, dipped 4.0%. Th^[1]e investor Michael Burry, known for predicting the 2008 financial crash, also bet against prominent AI companies like Palantir and Nvidia, sparking further scrutiny and contributing to the sell-off. Ale^[6]x Karp, Palantir's chief executive, criticized Burry and other short-sellers for "trying to call the AI revolution into question," according to an interview on CNBC. ##^[6]# Mixed Earnings and Macroeconomic Worries Beyond valuation concerns, a mix of corporate earnings reports also contributed to the market's downturn. While some companies beat expectations, the overall sentiment was that these results were not strong enough to sustain the elevated stock prices. Inv^[4][5]estors became wary that earnings needed to do more to justify the rich price levels after a strong market run since April. Ma^[5]croeconomic factors added to the uncertainty. The ongoing US government shutdown, which was nearing a record for the longest in American history, delayed critical economic data releases. Thi^[4][1]s absence of key data complicated the Federal Reserve's policy path and increased overall market uncertainty. Fed^[5][1]eral Reserve policymakers' recent comments stopped short of signaling further rate cuts, further adding to the cautious sentiment among investors. Ge^[5]opolitical tensions and fiscal spending were also cited by JPMorgan Chase CEO Jamie Dimon as factors creating an atmosphere of uncertainty. The^[7]se broader concerns created a "cocktail of macroeconomic worries" that contributed to the significant market decline. ##^[3]# Impact Across Markets The market crash on November 4 saw significant drops across major US indexes. The Dow Jones Industrial Average fell 251.44 points, or 0.53%, closing at 47,085.24. The^[1][3] S&P 500 lost 80.42 points, or 1.17%, ending the day at 6,771.55. The^[1][3] tech-heavy Nasdaq Composite experienced the largest percentage drop, losing 486.09 points, or 2.04%, to close at 23,348.64. Thi^[1][3]s marked the biggest one-day percentage drop for the S&P 500 and Nasdaq since October 10. Th^[1]e market downturn was not limited to US equities. Globally, stock markets in Asia and Europe also fell sharply, with Japan's Nikkei tumbling more than 4% and South Korea's Kospi sliding as much as 5% in the following days. The^[5][6] sell-off extended to cryptocurrencies, with Bitcoin falling below the $100,000 mark for the first time since June, and the broader crypto market losing an estimated $289 billion in value overnight. Eve^[5][2][3]n traditional safe-haven assets like precious metals, including gold and silver, saw declines, indicating a widespread market retreat. Th^[2][3]is unified downturn across various asset classes highlighted the interconnectedness of global financial markets. Declining issues outnumbered advancers by a 2.45-to-1 ratio on the NYSE and a 3.16-to-1 ratio on the Nasdaq, showing broad selling pressure. ##^[1]# What Happens Next? Investors are now closely watching for further corporate earnings reports and any developments regarding the US government shutdown and Federal Reserve policy. The widespread market retreat has led many to question whether this is a temporary correction after an extended rally or the beginning of a deeper reset in high-valuation sectors. Wal^[5]l Street observers continue to weigh the sustainability of the tech-led market surge and the potential for continued volatility in the near term.

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