Markets Snap Back to Reality as $3T is Wiped Out

The Nasdaq fell 2.2%

This morning, Markets in the US, both Wall Street and the ASX erased strong early gains after AI heavyweight Nvidia (NASDAQ: NVDA) posted quarterly results that topped expectations. The tech-heavy Nasdaq fell 2.2%, the S&P 500 lost 1.6%, and the Dow Jones Industrial Average closed down 0.8%, despite being up more than 700 points earlier in the session. Nvidia shares initially rose 5% after hours, briefly adding roughly US$450B in market value before those gains quickly evaporated.

Declining stocks outnumbered advancers three to one, underscoring how quickly optimism can turn to caution in a market priced for perfection. What stood out to me was not Nvidia’s performance, but the reaction it triggered. When even a near-flawless quarter from the market’s most celebrated company cannot sustain momentum, it shows how stretched sentiment has become and how fragile confidence might be heading into year-end.

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What was the driving catalyst

What’s interesting to note is how short-lived the AI bubble fears proved to be. Only a few hours after Nvidia delivered another outstanding quarter, the market quickly shifted from euphoria to realism. At some point, investors begin to recognise that even with stellar performance, expectations can climb too far ahead of fundamentals, which naturally raises the risk profile of any investment. Still, momentum traders often rush in, looking to capture short-term moves, adding to the volatility we’ve seen around AI-linked names.

Adding to the mix was the delayed September US jobs report, which painted a confusing picture. The economy added 119,000 jobs, well above forecasts, yet the unemployment rate edged up to 4.4%. That combination suggests one of two things, either companies are quietly reducing headcount in other areas, or the data may not fully reflect what’s happening on the ground. Either way, it adds another layer of uncertainty for markets already juggling rate expectations and inflated valuations in the tech sector.

Is market anxiety climbing

The VIX Index climbed 11% today to reach 26, a level that reflects a noticeable uptick in market anxiety. What stands out is that this rise came without any single major catalyst. Instead, it seems sentiment has turned mixed after an extraordinary run in equities, particularly in technology. From our perspective, this looks like a healthy and overdue correction. When valuations run too far ahead of fundamentals, the market eventually forces a pause, and that is likely what we are beginning to see unfold.

Could Japan be moving money back home

The 10-year JGB yield is around 1.82% as of 20 November 2025, the highest in nearly two decades, reflecting a sharp move this year. With the BOJ having ended its negative rate policy in March 2024, higher domestic yields raise the possibility that Japanese institutions might prefer home-bonds over overseas allocations. While large-scale repatriation has not yet materialised, analysts warn that if yields rise further or the yen strengthens sharply, the global carry and capital-flow dynamics could shift fast.