Wall Street Slips as Valuation Worries Rise and Rate-Cut Odds Fade

Wall Street Slips: Valuation Fears & Rate-Cut Doubts Shake Global Markets

On 18 November 2025, global financial markets, especially Wall Street, came under heavy pressure driven by two interlinked concerns: sky-high equity valuations and fading hopes for a December rate cut by the U.S. Federal Reserve. Investors are increasingly cautious, as uncertainty around valuation levels and monetary-policy direction rattles sentiment.

Major technology and AI-related stocks took the brunt of the sell-off. Notably, Nvidia dropped 2.6%, Advanced Micro Devices (AMD) fell 4.2%, Intel slipped 2.2%, and Amazon declined by 2.3%. Retailers also felt the pain: Home Depot slid 3.3%, Lowe’s dropped 1.3%, and Walmart gave up 0.48%.

Major indexes weren’t spared either. The Dow Jones Industrial Average fell about 0.80%, while the S&P 500 dropped 0.26%, both hitting one-month lows.

At the heart of this slump is the waning expectation that the Fed will cut rates in December. The probability of a rate cut has fallen sharply from previous months, reflecting growing concern that monetary policy may remain tighter for longer, dampening risk appetite.

Investors’ cash holdings have declined significantly, prompting caution. Many fund managers point to potential overvaluation in AI and tech, particularly among the largest mega-cap players. This has created a cautious mood in the markets, despite continued interest in equities and commodities.

Global markets beyond the U.S. also mirrored the unease. Asian markets slid, with Japan’s Nikkei and South Korea among the hardest hit. Across Europe, elevated uncertainty around AI valuations and rate cuts weighed on investor confidence.

Putting it all together, the current market pull-back signals more than just a short-term correction: it’s a warning. High valuation multiples, particularly in AI and tech, may no longer be justified if earnings disappoint or if monetary policy remains restrictive. Meanwhile, investors are reallocating toward more stable, long-term opportunities over speculative bets.

In summary, the sell-off on 18 November 2025 serves as a wake-up call for global investors: the euphoria surrounding technology-driven growth is being tested. As rate-cut prospects recede and valuation risks rise, caution is once again becoming the order of the day. For many, the focus may shift from chasing fast gains to preserving capital and building resilient, balanced portfolios.