US stocks: High valuation pressure and investor shift

Thị trường chứng khoán Mỹ: Cơn choáng váng đầu tiên dịu lại sau cú giảm sâu

The initial shock shook the US stock market but quickly subsided.

The S&P 500 dropped sharply by 1.3% at the start of the session, creating an early shock as tech stocks, especially Nvidia, faced selling pressure. However, the market quickly recovered and closed the trading day with a slight decrease, thanks to the correction of large stocks, especially Nvidia, which is a symbol of the AI technology fever. Nvidia shares, after starting the session down 3.4%, recovered and rose 1.8%, helping to pull back market sentiment.

Other stocks in the AI sector also recorded strong volatility, a sign that despite the strong market correction, technology stocks still play a key role in the development of the US stock market.

At the end of the trading session on the US stock market on November 14 (early morning of November 15, Vietnam time), the S&P 500 Index closed with a slight decrease of about 0.1%, down to 6,734.11 points. Meanwhile, the Nasdaq Composite had a small increase of 0.1%, reaching 22,900.59 points, although the trading session started with a struggle. In contrast, the Dow Jones Index fell sharply by 309.74 points, equivalent to -0.7%, closing at 47,147.48 points, after falling nearly 600 points in the first session.

Despite the S&P 500's late-session rally, critics say tech stocks, particularly in the AI space, may be overvalued.

Nvidia stock, typically one of the best performers in recent years, has seen spectacular growth, more than doubling in four of the past five years and still up 40% this year. However, given its high valuation, some experts worry that the market could face a sharp correction if earnings reports from companies like Nvidia fail to meet analysts' expectations.

“Sometimes a bear market is the price of the ticket,” said Brian Jacobsen, chief economist at Annex Wealth Management, emphasizing that corrections can be an inevitable part of the market’s upward trajectory.

In addition to the volatility in tech stocks, Walmart also attracted attention when it announced that CEO Doug McMillon would retire in January 2025, causing the company's stock to fall 0.1%. Although the decline was small, the leadership change still reflected pressures from within large corporations.

Smaller stock indexes like the Russell 2000, which represents small companies, had a more positive session, rising 0.2% to 2,388.23 points, showing that small companies are getting more support amid the correction of large companies.

One of the important factors affecting market sentiment is uncertainty about the Fed's interest rate policy.

Hawkish comments from several Fed officials this week have raised doubts about the Fed’s ability to cut interest rates in December; market expectations for such a move have also dropped sharply. This has made investors more cautious in deciding how to allocate capital. Investors are increasingly shifting to safe stocks and bonds, while continuing to closely monitor upcoming earnings reports.

A key factor last week was the sharp decline in inflows into equity funds, particularly in the technology sector. Just $1.15 billion was invested in equity funds, the lowest level since October. Large-cap funds saw a sharp decline to $2.35 billion from $11.91 billion a week ago, suggesting investors are pulling back from high-priced stocks.

This reflects a shift in investor sentiment, as instead of continuing to push into tech stocks, they are looking for less risky investments, such as bonds or large-cap stocks.

Overall, while the market is not in free fall, caution is increasingly taking over. Investors are now shifting from “chasing the wave” to “picking the wave,” focusing on stocks with good prospects and waiting for clearer signals from the Fed and upcoming earnings reports.

A rate cut from the Fed is still a factor that could help improve the situation, but until then, the US stock market will continue to maintain a cautious state, especially with technology stocks under pressure on valuations.

In summary, the trading session on November 14, 2025 was a complicated day but ended quite stable. The S&P 500 was almost unchanged, the Nasdaq recorded a slight increase while the Dow Jones continued to decline.

Market sentiment is shifting from tech-fueled euphoria to caution as investors reassess the true value of tech stocks and the impact of higher interest rates on the US stock market.

Source: https://thoibaonganhang.vn/chung-khoan-my-ap-luc-dinh-gia-cao-va-su-chuyen-huong-cua-nha-dau-tu-173609.html