Why Is the Market Down Today? Five Key Factors Driving Thursday's Selloff

Why Is the Market Down Today?

Updated: November 13, 2025, 3:05 PM EST

U.S. stock markets tumbled Thursday, with the Nasdaq Composite plunging 2.47% and the S&P 500 dropping 1.73% as investors digested the economic aftermath of America’s longest-ever government shutdown, disappointing corporate earnings from Disney, and a significant rotation away from high-flying technology stocks. The Dow Jones Industrial Average fell 1.64%, erasing its record close from just one day earlier.

The selloff reflects a critical inflection point where optimism about Washington’s reopening collides with mounting concerns about economic data reliability, Federal Reserve policy decisions, and stretched valuations in the artificial intelligence sector that powered this year’s rally.

Government Shutdown Aftermath Creates Economic Data Blackout

The immediate catalyst for Thursday’s market weakness stems from the resolution of the 43-day federal government shutdown, now officially the longest in U.S. history. While President Trump signed legislation Wednesday evening to reopen federal agencies through January, the damage to economic visibility has already been done.

The Congressional Budget Office estimates that U.S. GDP could be approximately $11 billion lower by the end of 2026 than previously projected due to the shutdown’s cascading effects on consumer spending, federal contracting, and business confidence. More critically for investors, the shutdown created a massive gap in the economic data that typically guides Federal Reserve policy decisions and market positioning.

Missing Economic Reports Fuel Uncertainty

Key data releases that investors rely on to gauge economic health remain conspicuously absent:

Consumer Price Index (CPI): October’s inflation data, originally scheduled for release this week, continues to be delayed with no confirmed publication date. White House Press Secretary Karoline Leavitt warned Wednesday that the Labor Department may never release October’s CPI report, leaving a permanent blind spot in inflation tracking.

Jobs Reports: The Bureau of Labor Statistics has not published employment data for October, and September’s report remains incomplete. National Economic Council Director Kevin Hassett indicated this morning that October’s jobs report might eventually be published excluding the unemployment rate, while September’s data could appear as early as next week, though with significant caveats about data quality.

Jobless Claims: Weekly unemployment insurance filings, a real-time indicator of labor market health, have not been updated since mid-October.

This data vacuum proves particularly problematic given recent signals of labor market softening. Outplacement firm Challenger, Gray & Christmas reported 153,074 job cuts in October, marking the highest total for that month in 22 years. Without official government confirmation, investors cannot accurately assess whether this represents a temporary blip or the beginning of broader employment deterioration.

“Economists think that it will be the end of 2025 or early 2026 before they start to feel confident again in government data, given the 43-day gap in collecting and analyzing information on jobs, inflation, and other key metrics,” said Michael Townsend, managing director of legislative and regulatory affairs at Charles Schwab.

Disney’s Revenue Miss Exposes Consumer Spending Vulnerabilities

Walt Disney Company’s fiscal fourth-quarter earnings report, released before Thursday’s opening bell, delivered a sobering reminder that even industry giants are struggling with shifting consumer behavior and legacy business challenges. Disney stock plummeted 8% after the company reported:

Revenue: $22.46 billion versus analyst expectations of $22.75 billion (a 1.3% miss)

Adjusted EPS: $1.11 versus estimates of $1.05 (an 8.4% beat on earnings)

The mixed results underscore a troubling pattern where companies can manage costs and boost profitability in the short term, but revenue growth remains elusive as consumers grow more selective about discretionary spending.

The Streaming Gains Cannot Offset Linear TV Collapse

Disney’s entertainment segment revenue fell 6% year-over-year to $10.21 billion, dragged down by accelerating declines in its traditional television networks. While Disney+ added 3.8 million subscribers during the quarter, beating expectations of 2.4 million additions, these gains could not compensate for the hemorrhaging of its legacy cable business.

The company’s ongoing dispute with YouTube TV, which resulted in Disney channels being unavailable to millions of subscribers since late October, further clouds the revenue picture. During Thursday’s earnings call, Disney CFO Hugh Johnston acknowledged that negotiations with Google‘s YouTube “could go for a little while,” suggesting the standoff might extend well into 2026.

According to CNBC’s analysis, Disney’s experiences division (theme parks and resorts) saw revenue grow only 6% year-over-year, falling short of Wall Street estimates despite record attendance at some properties. This weakness suggests American consumers are pulling back on high-cost entertainment experiences even before the full economic impact of the government shutdown materializes.

Technology Sector Rotation Accelerates on Valuation Concerns

The Nasdaq Composite’s 2.47% decline Thursday marked its worst single-day performance since October 10 and represented the index’s third consecutive down session. The technology-heavy benchmark has now fallen below its 50-day moving average of 22,810.13 for the first time since April 30, a technical indicator suggesting the recent correction could extend further.

Magnificent Seven Stocks Lead the Retreat

The market’s 2025 rally has been overwhelmingly concentrated in a handful of mega-cap technology companies, but that narrow leadership became a vulnerability Thursday:

Tesla (TSLA): Down 7%, extending losses after recent concerns about vehicle demand and competition in the electric vehicle market

Nvidia (NVDA): Down 4%, despite analysts raising price targets ahead of next week’s earnings report. Questions about the sustainability of AI infrastructure spending continue to weigh on the stock.

Broadcom (AVGO): Down 5%, reflecting broader semiconductor sector weakness

Arm Holdings (ARM): Down 5%, as investors reassess chip designer valuations following recent gains

These seven stocks (adding Apple, Microsoft, Alphabet, Amazon, and Meta) have accounted for roughly 41% of the S&P 500’s gains in 2025, according to S&P Dow Jones Indices. When they decline in unison, the mathematical impact on market-cap weighted indexes proves disproportionately large.

“It seems like a natural consolidation to me,” Ron Albahary, chief investment officer at Laird Norton Wealth Management, told CNBC. “Part of the AI narrative is that at some point all this capital expenditure is going to actually manifest itself. The benefits of it will manifest itself within the broader economy.”

Valuation Concerns Reach Critical Mass

Palantir Technologies, despite beating third-quarter earnings estimates and providing strong guidance, saw its stock tumble 8% earlier this week as investors questioned valuations exceeding 200 times forward earnings. This reaction signals a broader market reassessment of AI-related stocks that have been trading on future potential rather than current fundamentals.

The equal-weighted S&P 500 index (RSP), which gives equal importance to all 500 constituents rather than weighting by market capitalization, declined only 0.7% on Tuesday while the standard S&P 500 fell 1.17%. This divergence reveals that market weakness remains concentrated in the highest-valued technology names, while smaller companies and traditionally defensive sectors are holding up relatively well.

Federal Reserve Rate Cut Expectations Deteriorate

Market pricing for Federal Reserve interest rate policy shifted dramatically Thursday, with traders now assigning only a 55% probability to a December rate cut, down from 65% earlier in the week according to the CME FedWatch Tool.

This recalibration follows comments from Boston Federal Reserve President Susan Collins, who on Wednesday expressed skepticism about the urgency for additional monetary easing. Collins cautioned that providing more support to the economy through lower rates “runs the risk of slowing, or possibly even stalling, inflation coming back down to the Fed’s 2% target.”

The Data Dependency Problem

The Federal Reserve’s data-dependent approach to monetary policy creates a paradox in the current environment: policymakers need reliable economic data to make informed decisions, but the government shutdown has destroyed the integrity of that data for at least the next several months.

Without confidence in inflation readings or employment figures, the Fed faces pressure to maintain a cautious stance on rate cuts even if underlying economic conditions might warrant more aggressive easing. This uncertainty manifests in higher Treasury yields, with the 10-year yield climbing above recent lows and putting pressure on equity valuations.

The situation grows more complex considering recent alternative data suggesting labor market softness. ADP, the payrolls processing firm, reported Tuesday that private employers actually cut an average of 11,250 jobs over the past four weeks based on preliminary numbers. This contradicts earlier estimates showing October gains of 42,000, suggesting “that the labor market struggled to produce jobs consistently during the second half of the month,” according to ADP Chief Economist Nela Richardson.

Broader Market Rotation Into Defensive Sectors

Beneath the surface of Thursday’s headline declines, a significant reallocation of capital has been underway throughout the week. The Dow Jones Industrial Average, while falling 1.64% on Thursday, had reached a record close just one day earlier and remains the best-performing major index for the week.

This divergence reveals investor preference for:

Health Care: Pharmaceutical and medical device companies like Merck, Amgen, and Johnson & Johnson have seen sustained buying as investors seek exposure to sectors with more predictable revenue streams and less sensitivity to economic cycles.

Financials: Regional banks benefited from easing concerns about credit quality and commercial real estate exposure, with investors betting that the worst-case scenarios regarding loan losses will not materialize.

Consumer Staples: Food, beverage, and household product manufacturers are attracting defensive capital from investors anticipating a potential economic slowdown.

Materials: Industrial commodity producers and chemical companies have held up well, suggesting continued expectations for infrastructure spending and manufacturing activity despite broader economic concerns.

This rotation demonstrates that Thursday’s selloff is not indiscriminate panic selling, but rather a deliberate rebalancing away from the most expensive growth stocks toward value-oriented defensive positions.

Cryptocurrency Markets Mirror Stock Weakness

Bitcoin (BTC-USD) fell below $100,000 on Thursday, continuing what has been a challenging month for the world’s largest cryptocurrency despite earlier optimism about institutional adoption and the end of the government shutdown.

The total cryptocurrency market capitalization declined 0.8% to $3.57 trillion, with approximately 80 of the top 100 coins showing 24-hour losses. Ethereum (ETH) retreated to $3,502, finding support at the $3,200 level that has proven critical in recent weeks.

The Crypto Fear and Greed Index fell to 25 on Thursday, firmly within the fear zone and down from 26 the previous day. This sentiment reading suggests investors remain highly cautious despite bitcoin’s remarkable 2025 rally that saw it briefly touch all-time highs above $110,000 earlier this year.

Wednesday saw U.S. bitcoin spot exchange-traded funds (ETFs) record $277.98 million in outflows, following just a single day of notable inflows. According to data from CryptoNews, total net inflow for bitcoin ETFs has fallen back to $60.21 billion, though this figure still represents substantial institutional interest in cryptocurrency exposure.

The correlation between cryptocurrency selloffs and equity market weakness suggests that digital assets continue to trade as risk-on instruments rather than the uncorrelated alternative investments that some proponents envision.

Individual Stock Stories Adding to Market Pressure

Several high-profile earnings reports and company-specific developments contributed to Thursday’s negative sentiment beyond Disney’s disappointing results:

Cisco Systems Defies the Trend

Network equipment giant Cisco Systems (CSCO) emerged as one of the session’s few bright spots, rising approximately $4.90 after beating third-quarter earnings expectations and raising full-year guidance. The company reported:

Adjusted EPS: $1.00 versus estimates of $0.98

Revenue: $14.88 billion versus estimates of $14.77 billion

AI Infrastructure Orders: $1.3 billion from hyperscaler customers, representing “significant acceleration in growth”

“Our relevance in AI continues to build,” CFO Mark Patterson said in the company’s press release, highlighting Cisco’s positioning for multi-year campus network refresh opportunities driven by AI infrastructure buildouts.

Flutter Entertainment Disappoints Despite Earnings Beat

Shares of Flutter Entertainment, parent company of FanDuel and the world’s largest sports betting and gambling operation, fell 4% despite reporting better-than-expected earnings. Revenue missed expectations according to LSEG estimates, and the company cut its full-year guidance citing extended winning streaks by gamblers that reduced company profitability.

The company separately announced FanDuel Predicts, a new prediction markets app expected to launch in December, though this news failed to offset concerns about near-term financial performance.

Firefly Aerospace Surges on Results

Texas-based aerospace company Firefly Aerospace (FLY) jumped more than 20% after reporting a narrower-than-expected adjusted loss and exceeding revenue expectations for its third quarter. The company also raised its fiscal year 2025 revenue guidance to $150-158 million, well above the previous consensus forecast of $136 million.

Beyond Meat Extends Losses

Plant-based protein company Beyond Meat (BYND) fell 7.5% after reporting a wider third-quarter loss and providing weak sales guidance for the upcoming quarter. The stock has now declined 67.7% year-to-date, trading at $1.25 per share, down 76.5% from its 52-week high of $5.30 reached in November 2024.

What Thursday’s Selloff Means for Investors Going Forward

The market action on November 13, 2025, represents more than a typical down day in an otherwise strong year for equities. Several critical themes emerged that will likely shape market dynamics through the end of 2025 and into 2026:

Economic Data Reliability Will Remain Compromised

Even as government agencies return to normal operations, the 43-day data collection gap cannot be easily filled. Economic indicators released over the next several months will carry significant asterisks, forcing investors, policymakers, and business leaders to rely more heavily on alternative data sources from private sector firms like ADP, Challenger Gray & Christmas, and regional Federal Reserve surveys.

This environment of reduced data clarity typically leads to higher market volatility as investors struggle to build conviction around economic trends. The VIX volatility index, while not spiking dramatically, has risen from recent lows and could continue climbing if data uncertainty persists.

Technology Sector Leadership Faces Extended Testing Period

The dramatic concentration of 2025’s market gains in a handful of mega-cap technology stocks created a vulnerable market structure. With these companies trading at historically elevated valuations and facing increasingly skeptical questions about the return on massive AI infrastructure investments, further consolidation or correction in this sector appears likely before a sustainable uptrend can resume.

Goldman Sachs published research this week arguing that despite recent weakness, it does not believe a bubble has formed in AI-related stocks, and that “the AI story is just getting started.” However, even if this long-term bullish view proves correct, near-term volatility and downward pressure on valuations may persist as the market demands more tangible evidence of AI monetization.

Defensive Positioning May Prove Wise Into Year-End

The rotation into health care, financials, consumer staples, and materials suggests sophisticated investors are preparing for a potentially rockier path through the final weeks of 2025. With consumer sentiment near multi-year lows despite a strong job market (at least based on pre-shutdown data), the disconnect between market valuations and consumer confidence could resolve through either falling stock prices or improving sentiment.

The National Retail Federation’s forecast of 3.7-4.2% holiday retail sales growth reaching $1 trillion for the first time provides some optimism, though this projection was made before the full impact of the government shutdown and delayed federal assistance payments could be fully assessed.

Federal Reserve Policy Path Remains Murky

With rate cut expectations deteriorating and economic data reliability compromised, the Federal Reserve faces one of its most challenging decision-making environments in recent years. The December Federal Open Market Committee meeting looms large, with markets now pricing in nearly even odds for a rate cut versus a pause.

Fed officials will likely emphasize their data-dependent approach while acknowledging the limitations of currently available information. This could lead to more explicit forward guidance and longer-term policy frameworks rather than meeting-by-meeting decisions.

FAQ: Today’s Market Decline

Why did the stock market drop today?

The stock market fell Thursday due to a combination of factors: concerns about economic data reliability following the 43-day government shutdown, Disney’s revenue miss highlighting consumer spending weaknesses, a rotation away from expensive technology stocks, and deteriorating expectations for Federal Reserve rate cuts. The Nasdaq dropped 2.47%, the S&P 500 fell 1.73%, and the Dow declined 1.64%.

Is this the start of a bear market?

Today’s selloff does not automatically signal the beginning of a bear market (typically defined as a 20% decline from recent highs). The S&P 500 remains up approximately 13.4% year-to-date and is only about 2-3% below its recent all-time highs. However, the concentration of gains in a small number of mega-cap tech stocks and elevated valuations create vulnerability for further declines if economic conditions deteriorate.

What caused Disney stock to fall so dramatically?

Disney (DIS) plunged 8% after reporting fiscal fourth-quarter revenue of $22.46 billion, missing analyst estimates of $22.75 billion by 1.3%. While the company beat earnings expectations, investors focused on the 6% decline in entertainment segment revenue driven by collapsing linear TV business and an ongoing dispute with YouTube TV that removed Disney channels from millions of subscribers.

Why are technology stocks underperforming?

Technology stocks, particularly AI-related names, have underperformed due to valuation concerns after extraordinary 2025 gains. With companies like Palantir trading above 200 times forward earnings and mega-cap names like Tesla and Nvidia falling 7% and 4% respectively on Thursday, investors are rotating into more defensive sectors with lower valuations and more predictable cash flows.

When will we get reliable economic data again?

Economists estimate it will take until the end of 2025 or early 2026 before confidence in government economic data returns to normal levels. The 43-day shutdown created a significant gap in data collection for jobs, inflation, and other key metrics. Some reports may never be fully published, including potentially October’s Consumer Price Index and certain labor market statistics.

Should I sell my stocks now?

Investment decisions should be based on individual financial situations, time horizons, and risk tolerance rather than single-day market movements. Thursday’s selloff represents a healthy consolidation after strong 2025 gains rather than a fundamental breakdown in market structure. Long-term investors may view weakness as an opportunity to rebalance portfolios or add to quality positions, while short-term traders should respect technical levels and increased volatility.

How does the government shutdown affect my investments?

The government shutdown’s primary investment impact comes through reduced visibility into economic conditions due to delayed or missing data releases. This creates uncertainty for Federal Reserve policy decisions, corporate earnings guidance, and general economic forecasting. Secondary effects include reduced consumer spending from delayed federal assistance payments and potential GDP reduction of approximately $11 billion through 2026.

Why is Bitcoin falling along with stocks?

Bitcoin and cryptocurrency markets continue to trade as risk-on assets that correlate with equity market sentiment. When investors become more risk-averse and rotate toward defensive positions, they typically reduce exposure to volatile assets including cryptocurrencies. Bitcoin fell below $100,000 Thursday as part of this broader risk-off rotation.

What sectors are holding up best in today’s selloff?

Health care, financials, consumer staples, and materials sectors demonstrated relative strength during Thursday’s selloff. These defensive sectors benefit from more predictable revenue streams, lower valuations compared to technology stocks, and less sensitivity to economic cycles. The Dow Jones Industrial Average, which has greater exposure to these sectors, significantly outperformed the tech-heavy Nasdaq.

Is now a good time to buy stocks at lower prices?

Investors with long time horizons and adequate emergency savings may find opportunities during market selloffs to acquire quality companies at better valuations. However, with economic data reliability compromised, Federal Reserve policy uncertain, and technology sector leadership under pressure, patience may prove prudent. Dollar-cost averaging into positions rather than attempting to time a single bottom can reduce risk during volatile periods.

Key Takeaways for Investors

Thursday, November 13, 2025, marks a significant recalibration in market dynamics as investors confront the reality that optimism about the government reopening cannot erase the substantial economic and data integrity damage inflicted by 43 days of federal paralysis. The 2.47% Nasdaq decline, 1.73% S&P 500 drop, and 1.64% Dow retreat reflect legitimate concerns rather than irrational panic.

The combination of Disney’s disappointing revenue results exposing consumer spending vulnerabilities, technology sector valuation concerns reaching critical mass, deteriorating Federal Reserve rate cut expectations, and the unprecedented economic data blackout creates a challenging environment for risk assets in the near term.

However, several factors suggest this represents a healthy consolidation rather than the beginning of a severe bear market:

Corporate Profitability Remains Solid: While Disney’s revenue missed, earnings beat expectations by 8.4%. Companies are demonstrating ability to manage costs and protect margins even as top-line growth moderates.

Selective Rotation Rather Than Broad Panic: The outperformance of defensive sectors and the Dow’s relative strength indicate investors are reallocating capital rather than fleeing equities entirely.

Long-Term Structural Trends Intact: The artificial intelligence infrastructure buildout, as evidenced by Cisco’s strong AI orders, continues regardless of short-term volatility. Multi-year secular trends typically override near-term market turbulence.

Valuation Compression Creates Opportunity: The correction in overextended technology names may ultimately prove healthy by improving the market’s risk-reward profile and enabling sustainable gains from more reasonable starting valuations.

Investors should focus on portfolio positioning aligned with their specific time horizons and risk tolerance rather than attempting to perfectly time market bottoms. The increased uncertainty created by compromised economic data argues for maintaining adequate cash reserves and avoiding excessive concentration in any single sector or stock, while the long-term growth prospects for U.S. corporations suggest that panic selling would likely prove counterproductive.

As markets digest the government shutdown’s aftermath, the Disney earnings disappointment, and the technology sector rotation over the coming days and weeks, volatility will likely remain elevated. Patient, disciplined investors who maintain perspective on long-term fundamentals rather than short-term fluctuations typically navigate such periods most successfully.

Market data current as of November 13, 2025, 3:05 PM EST. This analysis is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results.

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Why Is the Market Down Today? Five Key Factors Driving Thursday’s Selloff