Market Recap

Week Ending 7th December 2025

Tech stocks took a bruising this week as nerves persist about expensive valuations and a potential artificial intelligence bubble.

The Nasdaq Composite closed lower by 0.21% on Friday. The tech-heavy index fell 3.04% across the week and suffered its worst week since early April, when President Donald Trump’s announcement of so-called reciprocal tariffs rocked markets.

The benchmark S&P 500 gained 0.13% on Friday after falling as much as 1.3% during earlier trading. The blue-chip Dow closed higher by 75 points, or 0.16%, after sliding more than 400 points earlier. The Nasdaq fell as much as 2.1% earlier before recouping losses.

Stocks bounced off their lowest levels of the day on Friday as investors bought the dip and embraced hopes that the US government shutdown — which became the longest in history this week — might come to an end soon.

tocks came under pressure this week as the CEOs of Goldman Sachs and Morgan Stanley voiced concerns about elevated valuations, while Wall Street’s bar for positive surprises on earnings results continues to rise after a monster rally in stocks in recent months.

“There are some concerns percolating under the surface with AI valuations,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute.

AI and tech stocks have driven the market’s bull run in recent years. As stocks rally, they can become relatively more expensive, creating an additional layer of consideration for investors. Meanwhile, there is increasing skepticism about whether the enormous amounts of money being spent on AI will be justified.

Nvidia shares (NVDA) and Palantir shares (PLTR) — two stars of the AI trade — fell roughly 7.1% and 11.2% on the week, respectively, and each had their worst week since April.

Oracle shares slid 8.89% this week and had their worst week this year.

“Sentiment and positioning have certainly become stretched, leaving the Mag Seven [tech companies] and broader tech complex vulnerable to profit taking,” Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions, said in an email.

“While there are some early yellow flags worth monitoring around circular and debt financing, much of the concern appears to be somewhat overdone in our view,” Melson said.

Also contributing to jitters this week: OpenAI, the center of the AI boom, found itself in some hot water after top executives backtracked from earlier comments that suggested government help might be needed to pay for the roughly $1.4 trillion in chips and infrastructure it has announced.

The S&P 500 on Friday briefly dipped below its 50-day moving average, a key threshold. The index finished the week down roughly 1.63% and snapped a three-week winning streak.

While concerns about tech are weighing on the market, the prolonged US government shutdown is also lingering in the background.

“The government shutdown creates further risk because the longer it continues, the more its impact will be felt on Main Street,” David Russell, global head of market strategy at TradeStation, said in a note.

Consumer sentiment also just hit its lowest level since June 2022, according to the University of Michigan’s latest survey. It’s a sign Americans are feeling increasingly worse about the economy and their personal finances, with many respondents citing the shutdown.

MEANWHILE in Europe....European markets closed weak on Friday, with most of the markets extending losses from the previous session, as lingering concerns about high valuations in AI-related stocks and uncertainty about the outlook for economic growth due to the US government shutdown.

There are also concerns that most of the major central banks will decided to hold rates unchanged in the upcoming meetings.

The pan European Stoxx 600 lost 0.55%. Germany’s DAX closed down by 0.68%, France’s CAC 40 ended down 0.18% and the U.K.’s FTSE 100 settled 0.55% down, while Switzerland’s SMI closed flat.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed weak.

Czech Republic, Iceland and Russia ended higher.

London stocks fell on Friday, with IAG among the biggest drags, capping a volatile week dominated by a flurry of corporate earnings and the Bank of England’s interest rate decision.