S&P 500 Set for Longest Losing Streak Since August as Bitcoin Falls Below $90K
The S&P 500 is on observe for a fourth consecutive decline as mounting issues over Federal Reserve coverage, shaky confidence in synthetic intelligence valuations and a pointy downturn in Bitcoin weigh on world markets.
Key Takeaways:
- The S&P 500 is heading for its fourth straight decline as Fed uncertainty, AI valuation fears and Bitcoin’s drop under $90,000 rattle markets.
- US shares now commerce at stretched valuations, with the S&P 500 at 22x ahead earnings.
- Traders are bracing for Nvidia’s earnings and key labor knowledge.
Futures tied to the benchmark index slipped 0.4% early Tuesday in New York, pointing towards the longest dropping streak since late August.
Nasdaq 100 futures additionally fell 0.4%, mirroring losses throughout Asian and European markets. Bitcoin added to the risk-off temper, briefly dropping under $90,000 for the primary time in seven months.
AI Valuation Jitters and Shutdown Fears Drag Down US Stocks
US equities have been underneath strain all through November, with buyers more and more uneasy about whether or not the AI commerce has pushed valuations too far.
The S&P 500 now trades at roughly 22 instances ahead earnings, effectively above its decade-long common of 19.
Sentiment has additionally been dragged decrease by issues surrounding the financial fallout from the longest US authorities shutdown on file.
“Appetite for AI is underneath strain from circularity worries and bubble fears,” Ipek Ozkardeskaya, senior analyst at Swissquote, told Bloomberg on Tuesday.
“The dangerous information is that among the extra bullish vibes — AI enthusiasm, large authorities stimulus, dovish central-bank expectations — are beginning to fade.”
Despite the latest weak point, dip-buying has remained lively. The S&P 500 managed to reverse sharp losses on Friday, recovering from a 1.4% slide to complete almost flat.
Still, choices knowledge reveals rising demand for bearish hedges within the tech sector, signaling a cooling of confidence within the sustainability of the latest rally.
The S&P 500 now sits about 3% under its October high and on Monday closed underneath its 50-day transferring common for the primary time since April, a degree many merchants view as a key marker of short-term momentum.
The subsequent catalyst could arrive Wednesday when Nvidia reviews quarterly earnings, a essential second for assessing whether or not the AI commerce nonetheless has gasoline.
Meanwhile, swaps markets present merchants decreasing expectations for a Fed price lower in December.
“We consider that the nervousness will persist till the September employment report gives better readability,” stated Homin Lee, senior macro strategist at Lombard Odier.
“At the present juncture, a comfortable US labor market knowledge or a big beat in Nvidia earnings might assist.”
Bitcoin Crashes Below $90K as ETF Investors Face First Losses
Bitcoin plunged underneath $90,000 on Tuesday for the primary time since April, erasing its whole 2025 rally and sending the common spot ETF investor into the crimson.
The drop pushed Bitcoin greater than 30% under its early-October file, marking the primary time ETF inflows, now sitting at a flow-weighted value foundation of about $89,600, have collectively turned negative.
The downturn triggered a wave of ETF outflows, with November 17 alone seeing $254 million exit US Bitcoin funds, led by massive redemptions from BlackRock’s IBIT and GBTC.
Bitcoin dominance additionally slipped under 60% as Ether fell underneath $3,000 and main altcoins, together with XRP, BNB, and Solana, posted losses of as much as 5.6%, signaling broad market stress.
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