Nvidia Slip Shakes Markets: Why Tech Volatility Drove a Split in US Equities

 

The U.S. equities market experienced a divergent opening on Tuesday, November 25, 2025, driven primarily by intense volatility within the influential technology sector. While the blue-chip heavy Dow Jones Industrial Average showed resilience by climbing 0.5% (adding over 200 points), the tech-centric Nasdaq Composite fell by 0.4%, pulling back from its significant rally the previous day. The S&P 500 index, which represents a broad cross-section of the market, hovered near the flatline.

The Catalyst: Nvidia's 4% Drop and Alphabet's Surge

The market sentiment was significantly influenced by a report from The Information suggesting a major strategic shift by Meta Platforms. The report indicated that Meta is considering redirecting billions of dollars in spending toward Alphabet's in-house AI chips, moving away from its reliance on Nvidia products.

This news immediately triggered a 4% drop in Nvidia's shares, putting immense pressure on the entire semiconductor and Artificial Intelligence (AI) complex which has been the primary engine of market momentum throughout the year. Conversely, Alphabet's stock soared over 3%, extending the gains it had already logged in the previous session.

This rotation highlights the increasingly competitive landscape in the high-performance semiconductor space. Major technology players are rapidly expanding their in-house or custom chip strategies to better manage and optimize their massive AI workloads, creating volatility and risk for established chip providers like Nvidia.

Macro Concerns and the Fed’s Path

This daily market pullback follows a strong rebound on Monday, where the S&P 500 jumped 1.6% and the Nasdaq posted its best performance since May 12 with a 2.7% gain. Despite this recent uptick, all three major U.S. indexes are currently on track for a losing month in November.

Investor concerns persist regarding the elevated valuations of major technology stocks, particularly those heavily tied to the AI boom. These fears fuel debate over whether the market can achieve a year-end rebound or if a further unwind of momentum is inevitable.

In the background, traders are closely monitoring signals from the Federal Reserve, with expectations for a monetary policy shift remaining high. According to the CME FedWatch Tool, markets are pricing in over an 80% chance of a quarter-point rate cut next month. This surge in expectations followed recent comments from New York Fed President John Williams and San Francisco Fed President Mary Daly supporting the potential for near-term easing due to ongoing labor market concerns.

Fresh data from ADP underscored these concerns, reporting that private companies have shed an average of 13,500 jobs per week over the preceding four weeks—a sharp acceleration from previous reports. With official government data releases hindered by the ongoing government shutdown, alternative indicators of labor health, such as the ADP report, have taken on heightened significance in guiding the Fed's imminent policy decision.