EconomyBrief
AI stock concerns accompanied November 5 sell-off in major indexes
Investors cited by the Globe and Yahoo discussed election implications and AI valuations, while the IMF described selling pressures in a later assessment.
The numbers
- Approximate S&P 500 decline during the reported trading session
- 4.4 %
- Approximate Nasdaq Composite decline during the reported trading session
- 5.5 %
U.S. stocks fell sharply on November 5, with the S&P 500 down about 4.4% and the Nasdaq Composite about 5.5%, according to reports of the Thursday session.
Larry Glazer, managing partner at Mayflower Advisors, told The Boston Globe that investors were thinking through the election’s economic implications and reassessing AI stocks, which had been a powerful market driver.
Kevin Mahn, chief investment officer at Hennion & Walsh, told Yahoo Finance that concerns about a perceived AI bubble had been building. Separately, AMD chief executive Lisa Su told Yahoo Finance’s Brian Sozzi she remained confident in longer-term AI demand.
In its November 6 market monitor, the International Monetary Fund said analysts viewed concerns about possible U.S. regulation after the election as an initial catalyst. Some analysts also attributed the broader selling to forced deleveraging by systematic funds, the IMF said.
The fund’s U.S. assessment also described institutional selling and technical pressures, alongside macroeconomic and geopolitical concerns.
What we don't know yet
- How much did each of the factors cited by investors and analysts contribute to the November 5 declines?
- What policy or demand changes, if any, will follow the election?
Timeline
The S&P 500 and Nasdaq Composite declined during the Thursday trading session.
The IMF issued its market monitor discussing analysts’ views and selling pressures.