US Stocks Face Decline as AI Concerns Weigh Heavily on Market

NEW YORK, Nov. 18, 2025 – US stocks closed lower on Tuesday, marking the fourth consecutive day of losses attributed largely to fears surrounding artificial intelligence (AI) valuations. The Dow Jones Industrial Average fell 613 points, or 1.3%, while the S&P 500 dipped 1.2%, extending its recent losing streak.

The Nasdaq Composite was hit hardest, dropping 1.7% as investors reduced their exposure to high-valuation tech stocks. With the buyout of AI-related investments and mounting concerns over the sustainability of the tech boom, the market has experienced significant turbulence in November.

“Tech companies have to spend to keep up with surging demand, but that demand largely hasn’t turned into profits or productivity,” said Callie Cox, chief market strategist at Ritholtz Wealth Management. Cox noted that investors are becoming skeptical about the benefits of their investments.

The decline has affected several major tech firms known as the “magnificent seven,” which include Alphabet, Amazon, Apple, Meta, Microsoft, Tesla, and Nvidia. Nvidia, for example, saw shares drop nearly 10% in November alone, exacerbating fears about the upcoming earnings report that could impact the AI market’s outlook.

On Tuesday, Nvidia shares dropped by 3%, while both Amazon and Microsoft also faced market pressure, causing further scrutiny over the excessive debt these companies have accumulated for rapid expansion of AI data centers.

A recent partnership between Microsoft and Anthropic, which involves a $30 billion investment, failed to stem the downward trend in tech stocks. Despite the announcement, both stocks remained in negative territory, hinting at deeper issues within the sector.

Concerns over AI valuation bubbles escalated significantly, as Google’s CEO Sundar Pichai warned of potentially irrational valuations in the AI space. Blue Owl, a major lender in AI finance, reported significant fund losses, leading to worries about private credit structures linked to AI and investor write-downs.

In another market indicator, Bitcoin briefly dipped below $90,000, impacting Asian markets and signaling potential troubles ahead for the broader stock market.

As the Federal Reserve’s third rate cut in December grows uncertain, investors are on edge, facing mixed signals in the labor market. Analysts noted that the mixed labor data complicates the Fed’s policy decisions, which aim to balance inflation control and economic growth.

Looking ahead, all eyes will be on Nvidia’s earnings report on Wednesday, which could either bring stability or accelerate the current selloff. Major retail reports from Walmart and Target due later this week could further clarify household demand trends for the holiday season.