US Market Slump Analysis: Technical Gamma Dynamics vs Fundamentals

This analysis is based on market data and technical research examining the November 13, 2025 US equity market decline, which saw major indices drop significantly amid concerns about underlying market dynamics [0].

The US equity market experienced broad-based weakness on November 13, 2025, with the S&P 500 closing at 6,737.49 (-1.3%), NASDAQ Composite at 22,870.36 (-1.69%), Dow Jones at 47,457.22 (-1.49%), and Russell 2000 at 2,382.98 (-2.4%) [0]. The technology sector showed particular vulnerability, consistent with a risk-off rotation toward defensive sectors.

The evidence strongly suggests that negative-gamma dynamics and dealer hedging cascades were the primary drivers rather than fundamental economic deterioration. According to market research, when dealers maintain negative gamma positions, they are forced to sell into declining markets to maintain delta-neutral hedges, creating a self-reinforcing downward spiral [1]. This effect is particularly pronounced given that over 50% of SPX options volume now comes from same-day-expiry options (0DTEs), significantly increasing market sensitivity to dealer positioning [1].

Defensive sectors showed relative resilience with Consumer Defensive (+0.87%), Basic Materials (+0.08%), and Healthcare (+0.06%) outperforming, while Utilities (-3.11%), Consumer Cyclical (-2.87%), and Real Estate (-2.37%) suffered the largest declines [0]. This rotation pattern aligns with technical deleveraging rather than fundamental concerns.

• NBIS (Nebius Group)
  : Declined 6.07% to $88.63, with an elevated P/E ratio of 103.06 suggesting growth premium compression [0]
• RKLB (Rocket Lab USA)
  : Fell 9.45% to $45.25, reflecting growth-stage volatility with negative EPS [0]
• ONDS (Ondas Holdings)
  : Notable exception with 19.06% gain to $6.56 on record Q3 revenue and raised 2025 forecast [0]

Academic research confirms that negative gamma environments correlate with increased intraday volatility and momentum, with market volatility increasing by 5-25 basis points for individual stocks and more than 20 basis points for indices during periods of large negative gamma imbalances [2]. The current market structure with high 0DTE concentration creates inherent fragility that can overwhelm fundamental price discovery.

The market behavior suggests a classic deleveraging scenario where multiple compression affects high-growth, high-multiple stocks disproportionately. AI capex and cloud spending remain intact, indicating that the drawdown reflects technical factors rather than a fundamental collapse in growth sectors.

The concentration of options activity in 0DTE instruments creates systemic fragility, as dealer hedging flows can trigger cascading effects that are disconnected from underlying fundamentals. This market structure evolution represents a significant shift in how price discovery occurs in modern equity markets.

• Technical Cascade Risk
  : Continued negative gamma exposure could amplify volatility and trigger additional forced selling
• Liquidity Constraints
  : Less liquid securities may experience exaggerated price movements during stress periods
• Market Structure Fragility
  : High 0DTE concentration creates potential for flash crashes during periods of stress
• Transition Risk
  : Technical-driven declines can quickly transition to fundamental concerns if sustained weakness impacts corporate earnings

• Options gamma exposure levels (particularly SPX and QQQ)
• Margin debt levels and risk parity fund positioning
• Institutional flow patterns and positioning data
• AI capex and cloud spending trends for fundamental validation

The November 13, 2025 market decline appears to be primarily a technical event driven by negative-gamma dynamics and dealer hedging cascades rather than fundamental economic deterioration. The sector rotation toward defensive names and disproportionate impact on high-growth stocks align with a deleveraging scenario. While AI capex and cloud spending remain intact, the market structure with high 0DTE concentration creates inherent fragility that warrants careful monitoring. ONDS emerged as a notable outlier with strong performance on positive fundamentals, while NBIS and RKLB reflected the broader growth stock pressure. Technical indicators suggest watching for gap fills and moving-average reclaims as potential stabilization points.