Stock Market Declines Amid Valuation Concerns and Labor Market Weakness
Equities faced downward pressure on November 18, 2025, with the S&P 500 and Nasdaq 100 both sliding over 1% as the VIX volatility gauge spiked 12%. Investor anxiety centers on stretched valuations—the S&P 500's forward P/E of 22.4x now exceeds its 10-year average—and growing skepticism about AI stocks. Bank of America's survey reveals 53% of fund managers view AI equities as bubble territory.
Labor market data exacerbated the selloff. Continuing jobless claims hit 1.957 million, the highest since August, while initial claims ROSE to 232,000. The figures, distorted by October's government shutdown, nonetheless reflect deteriorating employment conditions. Despite today's pullback, the S&P 500 remains up 32% from its April lows—a gain equivalent to three typical years of returns compressed into seven months.
