Tue Nov 18 15:40:00 UTC 2025: Summary:

U.S. stocks are declining, mirroring a global equity downturn, driven by concerns over inflated AI stock valuations (particularly Nvidia’s) and uncertainty surrounding the Federal Reserve’s December interest rate decision. Warnings from figures like JPMorgan’s Daniel Pinto about an AI stock correction, combined with awaited U.S. economic data releases, are fueling market jitters. Conflicting statements from Fed officials regarding potential rate cuts are adding to the uncertainty, with market sentiment shifting away from expectations of a December cut.

News Article:

Stocks Slide as AI Bubble Fears, Fed Uncertainty Grip Markets

NEW YORK – U.S. stocks tumbled Tuesday, extending a losing streak and mirroring a global market downturn amid growing anxieties about overinflated valuations in the AI sector and the Federal Reserve’s potential reluctance to cut interest rates in December.

The S&P 500 led the decline, falling as much as 0.6% in early trading, potentially marking its fourth consecutive day of losses – the longest such streak since August. The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite also fell.

The sell-off comes as Nvidia, the world’s most valuable public company, prepares to release its earnings report on Wednesday. Many analysts view Nvidia’s performance as a crucial indicator for the broader AI ecosystem, and fears are mounting that AI stocks are in an investment bubble.

“Even a mild disappointment could reinforce the market’s worries and spark a wider sell-off,” cautioned Russ Mould, investment director at AJ Bell, highlighting the high stakes surrounding Nvidia’s upcoming results.

JPMorgan Vice President Daniel Pinto echoed those concerns, warning that an AI stock correction is likely, potentially triggering a broader market downturn.

Global markets followed suit, with declines seen in Japan, South Korea, Britain’s FTSE 100, and France’s CAC 40.

Adding to the market unease is the anticipation of delayed U.S. economic data releases, including the September jobs report, postponed due to the recent government shutdown. Strong economic data could dissuade the Fed from cutting rates at its December meeting.

Recent remarks from Fed Chair Jerome Powell and other policymakers have cast doubt on the likelihood of a December rate cut. While Fed Governor Christopher Waller expressed support for a cut, citing labor market concerns, Boston Fed President Susan Collins suggested maintaining current rates.

The CME FedWatch tool now places the probability of a December rate cut at just 47%, a significant drop from last week, reflecting the growing uncertainty gripping the markets.

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