Market declines mark S&P 500’s worst week since 2025

The index has now experienced four consecutive weeks of losses. The State Street SPDR S&P 500 ETF Trust (NYSEARCA:SPY) mirrored this trend, decreasing by 2.7%, from $755.72 to $735.29.

The most substantial downturn occurred on Thursday, November 5. Preliminary midterm election results fueled a sell-off in artificial intelligence (AI) stocks, causing the S&P 500 to fall by 4.36%, its worst single-day performance since April 2025.

While the 2.68% weekly decline appears significant, it’s important to note that previous drops were more substantial. The week ending April 4, 2025, saw a 9.08% correction, with the index falling from 5,580.94 to 5,074.08. The current week’s position as the “worst since” is due to more moderate declines in the weeks following, specifically -2.61% (week ended May 23, 2025) and -2.59% (week ended June 5, 2026).

The downward trend began gradually, with losses of 1.95%, 0.47%, and 0.57% in the weeks leading up to November 6. The index currently sits 5.65% below its October 6 record close of 7,818.93.

The Nasdaq Composite experienced a more pronounced decline, falling 3.37% over the four-week period. The Nasdaq-100 also suffered losses, with a steeper decline of -5.49% during the week ending October 16.

The PHLX Semiconductor Index led the market’s decline, dropping 12.15%, from 10,688.80 to 9,390.25. The Technology Select Sector SPDR (NYSEARCA:XLK) and the SPDR energy sector fund also saw significant losses, falling 7% and 11% respectively. The Dow Jones Industrial Average, tracked by the SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA), proved more resilient, decreasing by only 0.94% to 51,285.73. Friday’s trading saw the Dow decline by 237.33 points (-0.46%), while the S&P 500 rose slightly (0.31%) and the Composite gained (1.09%), indicating that the selling pressure was concentrated in AI hardware and energy sectors.

The Invesco QQQ Trust (NASDAQ:QQQ) also experienced a decline, falling 4.98% to $656.10. Despite the SPY’s smaller decrease, it still holds substantial exposure to the same AI-related risks. As of March 2026, NVIDIA (NASDAQ:NVDA) alone represented 7.58% of the SPY fund, highlighting the concentrated impact of AI stocks on broader market indices.

October’s jobs report, indicating 165,000 jobs added, significantly exceeded expectations of 65,000. September’s job gains were revised upward to 60,000, and unemployment fell to 4.1%. This strong employment data has increased the likelihood of a December interest rate hike to 78%, up from 70% previously. Strong hiring can contribute to wage growth and inflation, potentially prompting the Federal Reserve to raise rates. Higher rates can negatively impact the valuation of future profits, particularly for technology stocks.

The October consumer price index (CPI) report, a key indicator of inflation, is scheduled for release on Tuesday, November 10, at 8:30 a.m. ET. NVIDIA is set to report its fiscal third-quarter results on November 17. A higher-than-expected inflation reading could increase the probability of a rate hike, while positive guidance from NVIDIA could help stabilize the chip stock sector.

Investment analysts remain cautiously optimistic. Keith Lerner of Truist Advisory Services views the AI sector as a central theme of the current bull market and suggests the recent sell-off presents a long-term buying opportunity. Adam Turnquist of LPL Financial characterized the week’s decline as a knee-jerk reaction to the midterm election results.

Despite the recent losses, the S&P 500 remains up 7.83% year-to-date. Investors seeking to reduce their exposure to AI stocks may consider an equal-weight S&P 500 fund, which distributes the index’s weighting more evenly across all companies. However, this positive outlook could be challenged if the S&P 500 closes below 7,376.86 on November 13, marking a fifth consecutive weekly loss, and NVIDIA’s earnings report fails to reverse the downward trend.