Wall Street is preparing for a volatile start to Monday, November 9, following a sharp technology-led selloff, renewed US military actions in Iran, and heightened speculation about another Federal Reserve rate hike. Despite warnings from some market observers about a potential “Black Monday” crash, evidence of an imminent collapse remains limited.
Tech stocks tumble after Democrats take Congress
The Nasdaq Composite plummeted 5.56% on November 5, as investors reevaluated technology sector prospects after the Democratic Party secured control of Congress in the US midterm elections. This shift has fueled concerns over stricter regulations related to artificial intelligence and increased operational costs for data centers, raising doubts about the pace of future infrastructure development.
Reuters reported that the S&P 500 declined about 4.4% the same day, while the Dow Jones Industrial Average shed more than 1,800 points. The initial optimism following Wednesday’s market rally quickly vanished, replaced by fears that legislative changes could limit growth in AI and related industries.
In the credit markets, traders sought higher yields for corporate bonds issued by AI-focused companies. While this trend highlights tighter lending conditions, it does not necessarily point to widespread capital flight from the sector.
Mini dictionary: S&P 500 is a major US stock market index composed of 500 leading publicly traded companies, often considered a primary benchmark for the overall US equity market.
The sharp Nasdaq drop reflected growing unease over government oversight and rising costs in the artificial intelligence sector following Democratic gains in Congress.
| Index | Change (%) | Result |
|---|---|---|
| Nasdaq Composite | -5.56% | Major decline |
| S&P 500 | -4.4% | Significant drop |
| Dow Jones | -1,800 pts | Steep fall |
Volatility spikes as VIX soars but crash remains unconfirmed
The Cboe Volatility Index (VIX), often called Wall Street’s “fear gauge,” jumped nearly 70% on November 5, climbing from 16.61 to 28.18. This move marked the third-largest single-day percentage increase since 1990, though the VIX stayed below crisis-era extremes.
By Friday, the VIX moderated to 25.64 as semiconductor stocks contributed to a partial rebound. The Nasdaq recovered 1.1% and the S&P 500 edged up 0.3%, but both benchmarks ended the week with overall losses, reflecting lingering market anxiety. Analysts cautioned that the late recovery did not eliminate the risk of renewed selling.
Friday’s recovery provided some relief after Thursday’s steep losses, yet continuing volatility left investors wary ahead of Monday’s trading session.
Geopolitical pressure and Fed expectations fuel uncertainty
Tensions increased after US President Donald Trump confirmed targeted strikes against Iranian air defense installations on Qeshm Island. This action followed previous US military operations amid the ongoing conflict with Iran. Rising concerns over the security of the Strait of Hormuz continued to affect global risk sentiment and oil markets.
The US labor market report released on Friday showed that American employers added 165,000 jobs in October, well above expectations of 65,000. Unemployment fell to 4.1%. Futures pricing suggested a 78% chance that the Federal Reserve would raise rates in December, intensifying pressure on technology companies that rely on low-cost financing.
Higher borrowing expenses threaten to squeeze profits for heavily leveraged tech firms and data center operators. The outlook for Monday’s market open remains highly uncertain, as investors grapple with unresolved geopolitical tensions and ongoing economic policy debates. While risks have risen, current data do not confirm a repeat of previous “Black Monday” style crashes.
Mini dictionary: The Cboe Volatility Index (VIX) tracks market expectations of near-term volatility based on S&P 500 index options. Higher values indicate rising uncertainty and increased risk aversion among traders.
