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On Tuesday, the Dow Jones Index (US30) fell by 0.53%. The S&P 500 Index (US500) declined by 1.17%. The technology-heavy Nasdaq Index (US100) closed lower by 2.04%. Investors intensified their concerns over the overheated valuations of artificial intelligence (AI) companies. Pressure mounted as the S&P 500’s forward P/E ratio rose above 23, bringing the metric close to the highs of the early 2000s and triggering fears of a correction after months of gains concentrated among a narrow group of AI giants. The technology sector was the hardest hit. Palantir plunged 8.1% due to valuation concerns despite reporting better-than-expected earnings. Nvidia (-2.7%), AMD (-2.1%), and Oracle (-2.6%) also saw notable drops. Market caution was amplified by warnings from Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick, who both suggested a potential market drop of 10-20%.

The Mexican peso weakened to 18.6 per US dollar, hitting an eight-week low as domestic and external factors amplified pressure on the currency. Local interest rates are now being priced by the market to include future cuts, while the dollar strengthened amid reduced expectations for an imminent Federal Reserve rate cut. The market anticipates that Banxico (Mexico’s central bank) will continue its easing cycle this week and lower the rate by 25 bps to 7.25%, which would narrow Mexico’s yield advantage and potentially weaken capital inflows into the peso.

The Bitcoin price dropped below $100,000, approaching two-month lows and intensifying the downtrend that began after the digital assets market’s “Black Friday” in mid-October. Global equities and digital assets were under pressure amid mounting concerns over the overheated valuations of artificial intelligence companies. Against this backdrop, spot Bitcoin ETFs experienced significant capital outflows. The correction also affected a broad range of altcoins.

European stock markets were mostly lower on Tuesday. Germany’s DAX (DE40) fell by 0.76%, France’s CAC 40 (FR40) closed down by 0.52%, Spain’s IBEX 35 (ES35) declined by 0.01%, and the UK’s FTSE 100 (UK100) closed up by 0.14%. Trading saw profit-taking amidst continued market uncertainty: the publication of key economic data remains suspended due to the ongoing US government shutdown.

Silver (XNG/USD) was under pressure yesterday due to weak demand for industrial metals after total US auto sales in October fell to a 14-month low. Additional negative impact came from comments by ECB Governing Council member Yannis Stournaras, who stated that the Eurozone’s economic growth prospects are subject to multiple downside risks. Nevertheless, precious metals retain fundamental support as safe-haven assets due to the ongoing US government shutdown, uncertainty surrounding tariff policy, geopolitical tensions, active central bank purchases, and political pressure on the Federal Reserve.
Asian markets also declined yesterday. Japan’s Nikkei 225 (JP225) fell by 1.74%, China’s FTSE China A50 (CHA50) dropped by 0.27%, Hong Kong’s Hang Seng (HK50) declined by 0.79%, and Australia’s ASX 200 (AU200) recorded a negative result of 0.91%.

The overnight sell-off on Wall Street dampened investor sentiment, increasing caution and lowering risk appetite in regional markets. The correction was driven by rising concerns over inflated valuations, particularly in the high-tech and AI-related sectors. An additional pressure factor was a private survey that showed China’s services sector posted its weakest growth in three months in October. The indicator reflects weakening external demand and continued job contraction.
New Zealand’s unemployment rate rose to 5.2% in the second quarter of 2025, slightly exceeding the previous quarter’s figure (5.1%) and matching market expectations. This marks the highest level since late 2016. The number of unemployed individuals increased to 158,000 compared to 156,000 in March, representing an annual increase of 16,000 people, or 11.1%. The data points to a further softening of the labor market and intensifies pressure on the RBNZ amidst the ongoing economic downturn.

• S&P 500 (US500) 6,771.55 −80.42 (−1.17%)
• Dow Jones (US30) 47,085.24 −251.44 (−0.53%)
• DAX (DE40) 23,949.11 −183.30 (−0.76%)
• FTSE 100 (UK100) 9,714.96 +13.59 (+0.14%)
• USD Index 100.20 +0.33% (+0.33%)
   

News feed for: 2025.11.05

• Japan Monetary Policy Meeting Minutes at 01:50 (GMT+2);
• Australia Services PMI (m/m) at 02:30 (GMT+2);
• Sweden Riksbank Rate Decision at 10:30 (GMT+2);
• German Services PMI (m/m) at 10:55 (GMT+2);
• Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• UK Services PMI (m/m) at 11:30 (GMT+2);
• Eurozone Producer Price Index (m/m) at 12:00 (GMT+2);
• US ADP Employment Change (m/m) at 15:15 (GMT+2);
• Canada Services PMI (m/m) at 16:30 (GMT+2);
• US ISM Services PMI (m/m) at 17:00 (GMT+2);
• US Crude Oil Reserves (w/w) at 17:30 (GMT+2).

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