Market Correction Analysis: Nasdaq's Worst Week Since April Challenges "Buy Everything" Rally

This analysis is based on the MarketWatch report [1] published on November 9, 2025, which highlighted that the bull market and “buy everything” rally in stocks now feels like an uphill battle, with tech and speculative assets coming under focus after the Nasdaq recorded its worst weekly performance since April.

The market correction represents a significant shift from the indiscriminate buying behavior that characterized much of 2025. The Nasdaq Composite declined from 23,834.72 on November 3 to 23,004.54 on November 7, representing a loss of approximately 830 points (-3.5%) for the week [0]. This marked the steepest weekly decline since April, with particular weakness in technology leaders like NVIDIA (NVDA), which fell from $206.88 to $193.16 (-6.6%) during the period [0].

The sell-off was primarily driven by growing skepticism about AI stock valuations, with AI-focused stocks collectively shedding more than $800 billion in market value during the week [2]. Companies like Palantir Technologies (PLTR), despite reporting strong Q3 2025 results (62.79% YoY revenue growth to $1.18 billion), saw their stock decline nearly 8% due to extreme valuation multiples exceeding 200x forward P/E [3].

: While technology faced pressure, defensive sectors showed remarkable resilience. Healthcare led with +1.55% gains, followed by Communication Services at +1.27%, while Utilities lagged at -1.55% [0]. This suggests a potential rotation into defensive positioning rather than a broad market collapse.

: The correction reveals critical valuation concerns, particularly in AI-related stocks trading at extreme multiples. The comparison to the 2000 dot-com bubble [2] highlights the market’s growing awareness of unsustainable valuation levels despite strong operational performance.

: Trading volumes surged to over 10 billion shares on Nasdaq during November 6-7 [0], indicating heightened investor activity and potential panic selling. This volume spike, combined with the technical breakdown, suggests that market psychology has shifted significantly from complacency to caution.

: The market weakness occurred amid multiple macroeconomic headwinds including ongoing government shutdown effects, consumer sentiment near three-year lows [2], elevated interest rates, and trade policy uncertainty. This confluence created a fragile environment vulnerable to shocks.

: The extreme valuations in AI and tech stocks, with some companies trading at 200x+ forward earnings [3], create substantial downside risk if growth expectations are not met. The current market environment exhibits characteristics of potential bubble dynamics that warrant careful monitoring.

: The Nasdaq’s recent decline below key moving averages and support levels could trigger further institutional selling and technical breakdowns. The index’s 52-week range shows significant room for further downside if current levels fail to hold [0].

: The combination of government shutdown, weak consumer sentiment, and high interest rates creates a fragile economic environment. Any additional negative developments could accelerate the current correction.

: Healthcare and Communication Services have shown relative outperformance [0], suggesting potential opportunities in defensive sectors during periods of heightened volatility.

: While the broad tech sector faced pressure, the divergence between fundamentally strong companies and overvalued names may create selective opportunities for investors who can differentiate based on valuation and growth sustainability.

: November historically marks the beginning of the year-end rally period. If current conditions stabilize, seasonal tendencies could provide support, though this may be overridden by ongoing macroeconomic concerns.

The November 2025 market correction represents a significant test for the “buy everything” rally. The Nasdaq’s 3.5% weekly decline [0] reflects growing investor skepticism about extreme valuations, particularly in AI stocks where companies like Palantir trade at over 200x forward earnings despite strong operational performance [3]. The market has shifted from indiscriminate buying to more selective, risk-averse behavior, as evidenced by the rotation into defensive sectors like Healthcare (+1.55%) [0] and surge in trading volumes exceeding 10 billion shares [0].

Key monitoring points include Nasdaq technical levels around 23,000 support, AI sector valuation compression trends, institutional flow patterns, and resolution of macroeconomic headwinds including the government shutdown. The current environment suggests that a more selective approach focusing on valuation discipline and defensive positioning may be warranted during this period of heightened volatility.