US stocks reverse gains as Nvidia rally fades, AI bubble fears return
The fall in the US market came after an early rally in Nvidia post its earnings faded. Nvidia stock, which rose 5% in early trade, ended 3.15% lower at $180.64.
- Nov 21, 2025,
- Updated Nov 21, 2025 10:15 AM IST
US indices suffered a sudden and violent reversal on Thursday after an initial surge, with the Dow Jones Industrial Average falling 386.51 points, or 0.84%, to end at 45,752.26. The S&P 500 declined 1.56% to finish at 6,538.76, and the Nasdaq Composite slipped 2.16% to 22,078.05. The sudden crash saw S&P 500 plunging nearly 2.5% in just 80 minutes.
This pullback followed a market-wide rally earlier in the session, when the Dow was up more than 700 points and the S&P 500 had gained nearly 2% before sentiment changed. The fall in the US market came after an early rally in Nvidia post its earnings faded. Nvidia stock, which rose 5% in early trade, ended 3.15% lower at $180.64.
CEO Jensen Huang emphasised strong demand for the company's Blackwell chips, stating demand is “off the charts.” He also dismissed concerns about an AI bubble, but the broader market was weighed down by growing scepticism over high valuations in the technology sector
Investors' optimism was dampened by receding expectations for another Federal Reserve interest rate cut in December. As the session progressed, focus shifted towards concerns that artificial intelligence stocks, including Nvidia and other leading technology companies, may have surged too quickly.
Questions remain over whether large investments in AI chips and data centres will deliver significant profits and productivity gains as expected by proponents. These factors contributed to increased market volatility heading into the end of the week.
The AI boom has brought new risks to the financial markets as investors are loading tech stocks at steep valuations, say analysts.
Meanwhile, the weakness in the US market spilled on to Asian bourses. Japan's Nikkei crashed 1150 pts to 48,673 and Taiwan Weighted fell 773 pts to 26,653.
US indices suffered a sudden and violent reversal on Thursday after an initial surge, with the Dow Jones Industrial Average falling 386.51 points, or 0.84%, to end at 45,752.26. The S&P 500 declined 1.56% to finish at 6,538.76, and the Nasdaq Composite slipped 2.16% to 22,078.05. The sudden crash saw S&P 500 plunging nearly 2.5% in just 80 minutes.
This pullback followed a market-wide rally earlier in the session, when the Dow was up more than 700 points and the S&P 500 had gained nearly 2% before sentiment changed. The fall in the US market came after an early rally in Nvidia post its earnings faded. Nvidia stock, which rose 5% in early trade, ended 3.15% lower at $180.64.
CEO Jensen Huang emphasised strong demand for the company's Blackwell chips, stating demand is “off the charts.” He also dismissed concerns about an AI bubble, but the broader market was weighed down by growing scepticism over high valuations in the technology sector
Investors' optimism was dampened by receding expectations for another Federal Reserve interest rate cut in December. As the session progressed, focus shifted towards concerns that artificial intelligence stocks, including Nvidia and other leading technology companies, may have surged too quickly.
Questions remain over whether large investments in AI chips and data centres will deliver significant profits and productivity gains as expected by proponents. These factors contributed to increased market volatility heading into the end of the week.
The AI boom has brought new risks to the financial markets as investors are loading tech stocks at steep valuations, say analysts.
Meanwhile, the weakness in the US market spilled on to Asian bourses. Japan's Nikkei crashed 1150 pts to 48,673 and Taiwan Weighted fell 773 pts to 26,653.