US stock markets were unstable on Friday. The NASDAQ Composite (IXIC) had its third drop of over 1% this week. The S&P 500 (SPX) fell 2.6% over the week, and the IXIC dropped 4.2%. The technology sector suffered, losing momentum after a six-month rally. A 13F filing from Michael Burry revealed he plans to short 1 million shares of Nvidia (NVDA) and 5 million of Palantir (PLTR). Moreover, U.S. corporations reported 153,000 layoffs in October, a 175% rise from last year—the highest October number since 2003.

Government Support For OpenAI

Uncertainty increased when OpenAI’s CFO called for government support for its $1.4 trillion data center plan but later backtracked. Nvidia CEO Jensen Huang voiced concerns that China could lead in AI by 2027, as Huawei’s technology is only 8% behind Nvidia’s chips. The preliminary Michigan Consumer Sentiment Index for November fell to 50.3, marking the lowest level since 2022. News that Senate Democrats intend to resolve the federal government shutdown offered slight market recovery, but this came after technical charts showed broken trendlines. The S&P 500 dipped below its 50-day Simple Moving Average for the first time since April. Attention now shifts to whether the S&P 500 will drop below the October 10 low of 6,550. The NASDAQ 100 (NDX) opened below its medium-term trendline but held above the 50-day level, raising hopes for a rebound. Nvidia briefly fell below $179, revisiting a trendline from August and closing the week over 7% down. The company needs to surpass the previous resistance of $153 to maintain support. All seven major tech stocks saw declines this week, although Apple, Amazon, and Alphabet performed better than the main indices. Nvidia’s losses compared to its peers raised concerns, as it played a significant role in the AI rally and overall market sentiment.

Market Concern Signals

The market is showing serious concerns after last week’s dramatic NASDAQ drop and broken technical levels. The Volatility Index (VIX) spiked above 25 for the first time since the 2023 banking crisis, indicating that traders are buying protection. This environment leads to rising options premiums, creating opportunities for hedging strategies and for those willing to sell options at higher levels. Recent economic data from late October and early November 2025 has been dismal. Corporate layoffs reached levels not seen in the fourth quarter since the 2008 financial crisis. The preliminary November consumer sentiment index just hit its lowest point since the 2022 bear market. This trend is supported by recent weekly jobless claims, consistently over 240,000, indicating a softening labor market. The S&P 500 has now dropped below its 50-day moving average, a technical warning not seen since late April. Next week, watch for the October 10 low at 6,550; a break below that could establish the first lower low in six months. If confirmed, the proximity of the 200-day average near 6,130 will become significant as the next major support zone. Nvidia is a primary focus, with its 7% drop this week making it a laggard among the Magnificent 7. We’re watching its weekly chart closely; a confirmed close below the retested trendline would signal a bearish trend. After briefly dipping below $179, traders may consider buying puts near $160 or selling call credit spreads to profit from further weakness toward the long-term support of $153. Given these developments, we should view any market strength next week with skepticism and see it as an opportunity to add hedges. The put-to-call ratio on the QQQ ETF, which tracks the NASDAQ 100, reached 1.3 on Friday, suggesting a strong bearish sentiment among traders. This indicates that a cautious approach is needed, as the AI rally leader is showing clear signs of weakness. Create your live VT Markets account and start trading now.

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