Week:
S&P500: -2.2% FTSE100: +0.3% Gold: +0.4% Bitcoin: 1.0%
YTD:
S&P500: +14.7% FTSE100: +17.8% Gold: +52.9% Bitcoin: 12.4%
Shutdown Deal Lifts Spirits After Volatile Tech Week
Source: Connect Weekly | Week ending 8 November 2025
US stocks ended a choppy week on firmer footing after signs emerged over the weekend that lawmakers had finally broken the deadlock on the record-setting government shutdown. The S&P 500 and Russell 2000 both finished higher, while the Nasdaq 100 lagged as the AI trade took a breather. A rotation out of tech and into cyclicals dominated the week, capped by a late-Friday rebound that helped markets recover from their worst midweek selloff since April.
What drove markets this week?
Monday kicked off with optimism over progress in US–China trade talks, sending the S&P 500 and Nasdaq 100 to fresh record highs. AI stocks powered the move, led by Amazon’s $38 billion cloud-computing deal with OpenAI and a flurry of megadeals across the sector. Semiconductor names rallied on improving demand, while Microsoft-backed IREN jumped on a $9.7 billion cloud partnership.
Tuesday brought the first stumble. Tech sold off as investors questioned valuations, with Palantir plunging despite strong results and reports that Michael Burry was shorting AI leaders. Momentum favourites from nuclear energy to quantum computing cratered, and crypto endured a deep selloff, dragging meme tokens and Bitcoin to multi-month lows.
Markets regained their footing on Wednesday as optimism grew that the Supreme Court could roll back Trump’s tariffs and that the government shutdown might soon end. The S&P 500 rebounded, led by Google, which struck a $1 billion annual deal with Apple to power Siri with its AI models. Airlines surged on hopes of a funding breakthrough, and AMD rallied on strong guidance.
The tone soured again on Thursday after the Challenger job-cuts report showed the steepest layoff pace in 22 years. The S&P 500 fell more than 1%, with speculative stocks and AI names hit hardest. Nvidia and Microsoft dropped on renewed AI fatigue, while CarMax and Warner Bros. tumbled after weak results.
Friday comeback and weekend breakthrough
Friday began bleakly as consumer sentiment hit near-record lows and Nvidia capped its worst week since April, but stocks staged a dramatic afternoon reversal. The S&P 500 closed marginally higher, led by consumer names like Monster Beverage and Expedia after strong earnings. DraftKings, Grindr, and Target also rallied on upbeat results and quirky headlines.
Over the weekend, relief finally arrived. The Senate passed a bipartisan procedural deal to fund the government, ending 40 days of paralysis. The measure still needs approval from the House, but it marks the first real progress in restoring federal operations and pay for 1.4 million workers.
Looking ahead
The focus now shifts to how quickly the government reopens and whether the shutdown’s economic damage shows up in November data. With Fed cuts still expected and earnings largely intact, markets appear poised for calmer trading, though the AI complex remains fragile after weeks of wild swings. Investors will be watching next week’s PPI, retail sales, and fresh guidance from megacap tech to see if the rebound has legs.
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