Wall Street Sees Split Session Amid AI Stock Sell-Off
US stock markets presented a mixed picture on Tuesday, November 11, as a significant sell-off in artificial intelligence (AI) sector shares, led by chipmaker Nvidia, created headwinds. This occurred alongside growing optimism that the longest US government shutdown in history might finally be nearing its end.
The S&P 500 managed a gain of 0.24%, closing at 6,848.91 points. Conversely, the tech-heavy Nasdaq Composite declined by 0.17% to 23,487.55 points. The Dow Jones Industrial Average outperformed, rallying 1.02% to finish at 47,852.49 points.
AI Sector Under Pressure from Multiple Fronts
Investors showed renewed skepticism towards the high-flying AI industry, concerned that company valuations had become overstretched. The sentiment was notably dampened by a major disclosure from Japanese technology investor SoftBank Group, which revealed it had sold its stake in Nvidia, offloading shares worth a substantial $5.8 billion. This news contributed to a 2.3% drop in Nvidia's stock price.
The bearish trend extended to other AI-focused companies. CoreWeave, a cloud computing firm backed by Nvidia, saw its shares plummet by over 14% after it trimmed its annual revenue forecast, citing unexpected hiccups in its data center operations. Other prominent AI names like Palantir and Meta Platforms also fell, each declining more than 1%.
Shutdown Progress and Economic Data Influence Sentiment
A key factor watched by the markets was the potential resolution of the protracted US government shutdown. Members of the US House of Representatives returned to Washington after a 53-day break for a critical vote that could end the political stalemate. The Polymarket betting platform was fully pricing in a resolution being reached this week.
Sam Stovall, CFRA Chief Investment Strategist, echoed the market's hopeful outlook, stating, "Expectations are that the shutdown is over. ... People will get back to work, economic data will be released once again and uncertainty will be behind us."
However, not all economic signals were positive. A preliminary weekly update from ADP showed that private employers shed an average of 11,250 jobs per week for the four weeks ending October 25. Adding to the economic discourse, US President Donald Trump warned of a potential economic and national security disaster if the Supreme Court ruled against his use of an emergency powers law to impose sweeping tariffs.
Among the day's gainers, the healthcare sector led the advance, rising 1.92%, with drugmakers Eli Lilly, Merck, and Amgen all posting gains between 2.5% and 4%. Paramount Skydance surged almost 9% after the newly merged media company announced further cost-cutting measures and a $1.5 billion investment plan for its streaming and studio divisions. Occidental Petroleum also gained 0.8% after beating third-quarter profit expectations.
US bond markets were closed for the Veterans Day holiday. Advancing issues outnumbered falling ones within the S&P 500 by a 2.7-to-one ratio.
