U.S. equities stumbled on November 14, posting their steepest single-day decline in over a month as AI heavyweights like Nvidia (NVDA-US) led a broad sell-off. Investor sentiment turned sharply cautious amid concerns that the Federal Reserve may slow its pace of interest rate cuts, reigniting worries about inflation and labor market resilience.
Indexes Slide Across the Board
The S&P 500 fell 1.66% to 6,737.49, the Nasdaq Composite dropped 2.29% to 22,870.36, and the Dow Jones Industrial Average lost 1.65% to 47,457.22. All three benchmarks recorded their biggest one-day declines in more than a month, underscoring the fragility of investor confidence.
Fed Policy Uncertainty Weighs on Sentiment
With the 43-day government shutdown now over, market focus has shifted back to monetary policy. Several Fed officials have signaled caution about further rate cuts, citing sticky inflation and a stable labor market.
According to the CME FedWatch tool, the probability of a 25 basis point cut in December fell to 47%, down from 70% just a week earlier. Asset managers warn that tariff-driven price pressures may not be transitory, complicating the Fed’s path forward.
AI Stocks Lead the Decline
The correction was most pronounced in AI concept stocks, which have surged over the past year.
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Nvidia (NVDA-US): -3.6%
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Tesla (TSLA-US): -6.6%
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Broadcom (AVGO-US): -4.3%
Analysts noted that valuations in the AI sector had reached stretched levels, making the sell-off a technical correction and capital rotation rather than a fundamental collapse.
Sector Rotation Emerges
Nine of the 11 major S&P sectors declined, with consumer stocks down 2.73% and information technology off 2.37%. Yet a clear rotation into defensive assets was visible: the S&P 500 Value Index rose 1% this week, while the Growth Index slipped 0.6%.
This shift suggests investors are reallocating funds away from high-growth technology names toward more stable value plays, reflecting heightened caution.
Labor Market Weakness Adds Pressure
Fresh data reinforced concerns about the labor market. ADP reported private companies shed an average of 11,000 jobs per week in October, while Indeed Hiring Lab noted retail job postings fell 16% year-over-year.
The weak employment signals added to the pessimism, with declining stocks outnumbering gainers in the S&P 500 by 2.8 to 1. Trading volume across the three major indexes hit 20.8 billion shares, above the 20-day average, indicating active portfolio repositioning.
The Bottom Line
The sharp drop in U.S. equities highlights the uneasy balance between AI-driven optimism and macroeconomic headwinds. Nvidia’s plunge triggered a sector-wide correction, while Fed policy uncertainty and labor market weakness deepened investor caution.
For now, the sell-off looks like a healthy adjustment after a year of soaring valuations. But with interest rate expectations shifting and economic data softening, markets may remain volatile heading into year-end.