Insights 
VT 
US stock markets were unstable on Friday, with the NASDAQ Composite (IXIC) experiencing its third drop of over 1% this week. The S&P 500 (SPX) recorded a 2.6% decline for the week, while the IXIC dropped 4.2%.
The technology sector was notably impacted, losing appeal after a six-month rally. A 13F filing by Michael Burry indicated a strategic move to short 1 million shares of Nvidia (NVDA) and 5 million shares of Palantir (PLTR). Additionally, reports showed US corporations had 153,000 layoffs in October, a 175% increase from the previous year and the highest October figure since 2003.
Government Support For OpenAI
Further uncertainty arose when OpenAI’s CFO allegedly called for government support for its $1.4 trillion data centre plan but later retracted the statement. Nvidia CEO Jensen Huang expressed concern that China could surpass in AI by 2027 due to Huawei’s progressing technology, trailing Nvidia’s chips by just 8%.
The preliminary Michigan Consumer Sentiment Index for November dropped to 50.3, the lowest since 2022. News that Senate Democrats proposed to end the federal government shutdown offered slight market recovery, but not before technical charts showed broken trendlines.
The S&P 500 fell below its 50-day Simple Moving Average, a first since April. Attention now turns to whether the S&P 500 will breach the October 10 low of 6,550. The NASDAQ 100 (NDX) opened below its medium-term trendline but maintained its 50-day level, raising hopes for a rebound.
Nvidia briefly fell below $179, retesting a trendline from August, closing the week over 7% down. The company remains reliant on surpassing the prior resistance at $153 to maintain support.
All Mag 7 stocks saw declines this week, though Apple, Amazon, and Alphabet outperformed the main indices. Nvidia’s losses compared to its peers raised concerns, given its role in the AI rally and the broader market sentiment.
Market Concern Signals
The market is signaling serious concern after this past week, which saw the NASDAQ drop sharply and break key technical levels. We are seeing the Volatility Index (VIX) reflect this, as it spiked above 25 for the first time since the banking turmoil of 2023, suggesting traders are actively buying protection. This environment means options premiums are rising, which creates opportunities for hedging strategies and for those willing to sell premium at elevated levels.
The economic data from late October and early November 2025 has been particularly poor, with corporate layoffs hitting a level not seen in a fourth-quarter month since the 2008 financial crisis. This is clearly weighing on the public, as the preliminary November consumer sentiment index just fell to its lowest point since the 2022 bear market. This weakness is supported by recent weekly jobless claims, which have been consistently trending above 240,000, signaling a softening labor market.
We have now seen the S&P 500 break below its 50-day moving average, a technical warning we haven’t faced since late April of this year. The key level to watch next week is the October 10 low at 6,550, as a break below that would establish the first lower low in six months. A confirmed break there would bring the 200-day average near 6,130 into focus as the next major support zone.
Nvidia is the primary focus, as its 7% drop this past week makes it a notable laggard among the Magnificent 7. We are watching its weekly chart closely, as a confirmed close below the retested trendline would be a significant bearish signal. With the stock briefly touching below $179, traders are likely considering buying puts with strikes near $160 or selling call credit spreads to capitalize on further weakness toward the long-term support at $153.
Given these developments, we should view any market strength in the coming week with skepticism and consider it an opportunity to add hedges. The put-to-call ratio on the QQQ ETF, which tracks the NASDAQ 100, hit 1.3 on Friday, a high that indicates significant bearish sentiment is building among traders. This suggests a cautious stance is warranted, as the market leader for the AI rally is flashing clear signs of weakness.
