U.S. stock market retreated significantly on Monday, November 17, as investor scrutiny intensified over technology valuations tied to artificial intelligence capital spending. The Dow Jones Industrial Average fell 557 points (-1.18%) to 46,590.24, while the S&P 500 declined 0.92% to 6,672.41, and the Nasdaq Composite dropped 0.84% to 22,708.07.[1][2][3]
Technology Sector Faces Scrutiny Amid Artificial Intelligence Capital Spending Concerns
The stock market retreat continues broader correction erasing gains from six consecutive months of strength.[4]
| Index | Points Change | Percentage Change | Closing Level |
|---|---|---|---|
| Dow Jones | -557.24 | -1.18% | 46,590.24 |
| S&P 500 | -61.44 | -0.92% | 6,672.41 |
| Nasdaq Composite | -196.47 | -0.84% | 22,708.07 |
Nvidia Leads Stock Market Retreat Ahead of Third-Quarter Earnings Results
Nvidia fell 1.8% amid growing investor scrutiny over artificial intelligence capital spending returns and valuations. Wall Street expects third-quarter earnings of $1.25 per share on $54.9 billion revenue, representing 54-56% year-over-year growth. CEO Jensen Huang disclosed $500 billion in pre-orders for Blackwell chips through 2026.[5][6][7][8]
However, the stock market retreat signals skepticism about whether current tech valuations justify future earnings growth.[5]
Institutional Investors Question Artificial Intelligence Capital Spending and Valuations
Bank of America surveyed 202 fund managers overseeing $550 billion in assets, finding significant investor scrutiny over technology valuations:[9][10]
- 45% identified AI bubble as top tail risk (up from 33% in October)[9]
- Net 20% stated companies are overinvesting in artificial intelligence (highest level since 2005)[11]
- 53% already believe AI exists in a bubble currently[9]
- Alphabet CEO Sundar Pichai stated no company is immune if bubble bursts[12][13]
Salesforce and Apple also declined, contributing to technology sector weakness.[14][5]
Read More: Stock Market Ends Mixed as Federal Reserve
Private Credit Sector Under Pressure Following Blue Owl Capital Merger Announcement
Redemption Freeze Impacts Fund Investors and Market Confidence
Blue Owl Capital declined 5.8% after freezing redemptions in Blue Owl Capital Corporation II due to planned merger. Investors face approximately 20% losses on holdings until early 2026.[15][16][17]
The action highlights vulnerabilities in the $1.7 to $3 trillion private credit sector. Morgan Stanley projects the market could reach $5 trillion by 2029.[18][19]
Market Concerns About Private Credit Leverage and Asset Quality
Recent bankruptcies at First Brands and Tricolor raise asset quality concerns throughout the sector. Leverage levels within nontraditional lending vehicles remain elevated, with liquidity pressures potentially worsening.[17][20]
Federal Reserve Rate Policy and Economic Data Releases This Week
Fed December Rate Cut Expectations Decline Sharply
Fed funds futures show 41-46% probability of a December rate cut, down from approximately 100% one month ago. Analysts predict 4-5 dissenting votes if no cut is approved, potentially the highest level since 1992.[21][22][23][24][25][26]
September Jobs Report and Upcoming Economic Announcements
Critical releases this week include:
| Event | Date | Time (ET) | Importance |
|---|---|---|---|
| Nvidia Earnings | November 19 | After close | Addresses AI capital spending ROI |
| Fed October Minutes | November 19 | 2:00 p.m. | Policy tone and inflation stance |
| September Jobs Report | November 20 | 8:30 a.m. | Labor market health; consensus ~50,000 |
| Walmart Earnings | November 20 | Before open | Consumer spending indicator |
The October unemployment rate will not be published due to government shutdown data collection gaps.[27]
You may like: U.S. Stock Markets Tumble as Trump Threatens China
Stock Market Performance and Valuation Recalibration
The S&P 500 is down 3.6% from its all-time high of 6,920.34 set October 29, 2025. The index is down 2% for November after six consecutive months of gains. Technology valuations remain under pressure, with the sector down 5% in November and nearly 7% from peak.[28][4]
The recent stock market retreat reflects growing investor scrutiny of technology valuations following a seven-month bull run that pushed prices to historically elevated levels over recent months.
