US Stocks turned lower on Thursday as major Wall Street indexes briefly extended morning losses, with concerns over overheated valuations and layoffs weighing heavily on investor sentiment.
Why US Stocks Are Falling Today
“There’s great cause for concern in the market because big investors like Michael Burry are putting in large short positions on top companies,” said Ryan Jacobs, founder of Florida-based Jacobs Investment Management. “In addition, key indicators like the Shiller P/E ratio and the Buffett indicator are both showing the market is overvalued. Retail investors have cause for concern moving forward.”
The remarks came as traders focused on a mix of warning signs—Burry’s short bets, renewed worries about an AI stock bubble, and sobering employment data—adding to a tense atmosphere across financial markets.
Major Indexes Slide on Valuation Fears
The Dow Jones Industrial Average slipped about 455 points, or 1%, while the S&P 500 fell 1.2% and the Nasdaq Composite tumbled 1.9%. The declines follow Wednesday’s brief relief rally, which had ended with investors seemingly brushing off concerns about an AI bubble and the continuing government shutdown.
However, those gains quickly evaporated as Thursday’s trading unfolded. Renewed anxiety about lofty AI stock valuations resurfaced, dragging down tech shares and leading broader indexes lower.AI Sector Under Pressure Again
High-profile AI names led the retreat. Advanced Micro Devices (AMD) fell 7%, Qualcomm (QCOM) dropped 4% despite strong earnings, and Palantir Technologies (PLTR) and Oracle (ORCL) lost 4% and 3%, respectively.Even sector favorites like Nvidia (NVDA) and Meta Platforms (META) joined the decline.
One exception was Marvell Technology (MRVL), which rose nearly 1% following reports that SoftBank had explored a potential takeover. Still, the overall AI-heavy tech sector faced renewed pressure as investors reconsidered how much optimism had already been priced in.
Economic Concerns Mount as Layoffs Spike
Adding to the gloom, new data from Challenger, Gray & Christmas showed that U.S. In October, 153,074 jobs were cut by companies. This was the most for that month since 2003 and an 183% rise from September. The number shows that the job market is getting weaker. 2025 is expected to be the worst year for cuts since 2009. The record-breaking U.S. government shutdown, which is now in its 37th day, has kept the government from releasing many data sets, which has led to a rise in job losses. Businesses and investors are less sure what will happen because of the long-lasting stalemate. How Treasury Yields, the Dollar, and Commodities Change.
Bond markets saw modest movement as the 10-year Treasury yield fell to 4.08% from 4.16% a day earlier. The U.S. dollar index weakened 0.4% to 99.80, while gold futures held steady just below $4,000 per ounce.
West Texas Intermediate crude fell about 1% to $59 per barrel on the energy markets. This was due to people being careful and worried that the economy is slowing down.
At the same time, Bitcoin traded around $100,500 after hitting a high point near $104,200 earlier in the session. Earlier this week, it fell below $100,000 for the first time since June.
Individual Stock Movers: Tesla and DoorDash Slide
Among major movers, Tesla (TSLA) dropped 5% ahead of a critical shareholder vote on CEO Elon Musk’s trillion-dollar pay package. The meeting, set for later Thursday, will also address other governance proposals, with final results expected in an upcoming SEC filing.
DoorDash (DASH) shares sank 15% in post-earnings trading after disappointing results, while Duolingo (DUOL) nosedived 29%. By contrast, Datadog (DDOG) jumped 21% and Snap (SNAP) climbed 9% following upbeat quarterly reports.
Airline stocks also struggled, with Delta (DAL), United (UAL), and American (AAL) falling modestly after the Federal Aviation Administration (FAA) announced a 10% traffic reduction at 40 major airports amid unpaid controller shortages caused by the shutdown.
Pharma Headlines: Pfizer and Novo Nordisk in Focus
In the pharmaceutical sector, Metsera (MTSR) surged 15% after reports that Pfizer (PFE) intends to sweeten its offer to acquire the weight-loss startup amid a bidding battle with Novo Nordisk (NVO), maker of Ozempic and Wegovy. Pfizer’s shares edged up 1%, while Novo Nordisk’s U.S.-listed stock fell 2.5%.
Broader Economic and Political Backdrop
Investors also kept a close eye on Washington, where the Supreme Court is reviewing the legality of former President Donald Trump’s tariffs. Analysts say a ruling against the administration’s trade policies could roll back many tariffs and potentially lift stocks in the near term.
Still, there is a lot of doubt. With overvalued AI, mass layoffs, and ongoing political turmoil, Wall Street is dealing with a shaky situation that makes many people think of the wise words of famous short sellers like Michael Burry.
Outlook: Volatility Likely to Continue
As market volatility persists, analysts expect investors to remain defensive in the coming weeks. “We’re still very early in the AI super-cycle,” noted Shirl Penney of Dynasty Financial Partners. “But it’s also a phase where valuations need to reconnect with fundamentals.”
With economic indicators flashing mixed signals and speculative momentum cooling, traders appear to be bracing for further turbulence before clarity returns to the market.
