The Nasdaq experienced a significant decline, dropping 533 points to 25,575 during trading this past Tuesday. Meanwhile, Gold prices fell nearly $70, or 700 pips, settling at $3,931.65 per troy ounce. The sell-off in the Nasdaq persisted on Wednesday (November 5, 2025), with a decline of 248 points to 25,327.
The downturn in this technology index was primarily driven by a sharp drop in Palantir’s stock, which plummeted by 8% despite reporting earnings that surpassed expectations for the third quarter of 2025. Additionally, there are growing concerns that stocks associated with the AI boom have become excessively overvalued, further exacerbating the sell-off.
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Furthermore, expectations for a rate cut by the Federal Reserve in December have faded following the announcement of monetary policy at the end of October. In this announcement, the Fed reduced interest rates by 25 basis points to a range of 3.75%-4%. However, the Fed Chair indicated that another rate cut by the year’s end is not guaranteed.
This statement contrasts with projections made in September when the Fed lowered rates and released a *dot plot* suggesting two more rate cuts this year (in October and December) and only one in the following year.
According to data from the FedWatch tool, market participants are now estimating a 69% likelihood of a rate cut in December, a significant decline from over 90% before Powell’s remarks.
The diminishing expectations for a Federal Reserve rate cut have strengthened the US dollar, placing additional pressure on Gold, causing it to retreat from the $4,000 per troy ounce level.
