Are AI-driven markets taking a healthy pause … or signaling something more?
Home / Are AI-driven markets taking a healthy pause … or signaling something more?
By Thierry Hasse, Chief Investment Officer, Elevage Partners
Markets stepped back last week, with the Nasdaq leading the decline. Technology companies, particularly those tied to artificial intelligence, saw notable selling pressure. After a strong rally since the spring, investors are questioning whether the recent weakness is simply a pause or the start of something deeper. Meanwhile, the ongoing government shutdown continues to weigh on consumer sentiment as the holiday season approaches.
Below is what moved markets last week, and what we are watching next.
Technology Stocks Lead the Week’s Pullback
Chief Investment Officer Thierry Hasse
All major U.S. equity indices finished the week lower, but the Nasdaq’s roughly 3% pullback stood out after months of steady gains. The retreat was largely concentrated among companies at the center of the AI investment theme, including Nvidia, Microsoft, Oracle and Palantir.
The move also drew comparisons to early April — a period sometimes referred to in financial media as “Liberation Day,” when the administration announced sweeping global tariff measures. You may remember that those tariffs were intended to shift manufacturing back to the U.S. But they also raised expectations for higher input costs, which is why markets reacted so abruptly at the time. That announcement triggered a swift 10% selloff as investors recalibrated assumptions about earnings and global supply chains.
Last week’s decline was far more measured. We view this as a normal and healthy pause, reflecting investors taking profits in sectors that have experienced significant year-to-date gains and reallocating into more defensive areas, including consumer staples and healthcare. The strong afternoon rebound on Friday further demonstrated the resilience markets have shown since the April setback.
Government Shutdown Pressures Consumer Confidence
While stock prices have held relatively firm in recent months, the prolonged government shutdown is beginning to show up in consumer data. The University of Michigan consumer sentiment survey declined to its lowest level in more than three years. With many official government economic reports delayed due to the shutdown, investors are relying more heavily on private indicators to gauge the health of the labor market and household spending.
Challenger, Gray & Christmas reported that October job cut announcements were the highest for that month since 2003, with the year-to-date pace now the most elevated since the 2009 Great Recession. As companies adopt new technologies and streamline operations, the labor market is shifting — and not evenly across sectors.
With inflation still hovering around 3%, delayed federal paychecks and reduced benefits in some assistance programs, many households are feeling increased financial strain. This is meaningful as we enter the holiday season, which typically accounts for nearly one-fifth of annual retail spending. Retail performance in November and December will be watched closely.
What We’re Watching Next
All eyes will be on Nvidia’s quarterly earnings report on Nov. 19. While the company is widely expected to exceed current-quarter expectations, the key question for investors is the outlook for 2026; specifically, demand for its next-generation Blackwell chips used to power large-scale AI computing environments.
If demand expectations remain strong, that could provide support to technology shares. If guidance signals a slowdown in infrastructure investment, volatility may continue.
Looking Ahead
Markets do not move in a straight line. Periods of strong performance are often followed by pauses or brief pullbacks. What matters most is whether the underlying economic and earnings picture remains supportive. At this stage, the broader environment continues to reflect resilience alongside adjustment.
At Elevage Partners, our focus remains consistent:
Diversification across sectors and strategies.
Disciplined rebalancing.
Alignment with your long-term plan and purpose.
Short-term headlines will continue, as they always do. Our work is to look through them — and prepare, rather than react.
At Elevage Partners, we anticipate — we prepare.
Important Disclosure(s)
The information contained herein represents the views of Elevage Partners at a specific point in time and is based on information believed to be reliable. No representation or warranty is made concerning the accuracy of any data compiled herein In addition, there can be no guarantee that any projection, forecast, or opinion in these materials will be realized. Any statement non-factual in nature constitutes only current opinion which is subject to change. These materials are provided for informational purposes only and do not constitute investment advice. Any reference to a security listed herein does not constitute a recommendation to buy, sell, or hold such security. Past performance is no guarantee of future results. The historical returns of any securities and/or sectors mentioned in this commentary are not necessarily indicative of their future performance.
Are AI-driven markets taking a healthy pause … or signaling something more?
Home / Are AI-driven markets taking a healthy pause … or signaling something more?
By Thierry Hasse, Chief Investment Officer, Elevage Partners
Markets stepped back last week, with the Nasdaq leading the decline. Technology companies, particularly those tied to artificial intelligence, saw notable selling pressure. After a strong rally since the spring, investors are questioning whether the recent weakness is simply a pause or the start of something deeper. Meanwhile, the ongoing government shutdown continues to weigh on consumer sentiment as the holiday season approaches.
Below is what moved markets last week, and what we are watching next.
Technology Stocks Lead the Week’s Pullback
All major U.S. equity indices finished the week lower, but the Nasdaq’s roughly 3% pullback stood out after months of steady gains. The retreat was largely concentrated among companies at the center of the AI investment theme, including Nvidia, Microsoft, Oracle and Palantir.
The move also drew comparisons to early April — a period sometimes referred to in financial media as “Liberation Day,” when the administration announced sweeping global tariff measures. You may remember that those tariffs were intended to shift manufacturing back to the U.S. But they also raised expectations for higher input costs, which is why markets reacted so abruptly at the time. That announcement triggered a swift 10% selloff as investors recalibrated assumptions about earnings and global supply chains.
Last week’s decline was far more measured. We view this as a normal and healthy pause, reflecting investors taking profits in sectors that have experienced significant year-to-date gains and reallocating into more defensive areas, including consumer staples and healthcare. The strong afternoon rebound on Friday further demonstrated the resilience markets have shown since the April setback.
Government Shutdown Pressures Consumer Confidence
While stock prices have held relatively firm in recent months, the prolonged government shutdown is beginning to show up in consumer data. The University of Michigan consumer sentiment survey declined to its lowest level in more than three years. With many official government economic reports delayed due to the shutdown, investors are relying more heavily on private indicators to gauge the health of the labor market and household spending.
Challenger, Gray & Christmas reported that October job cut announcements were the highest for that month since 2003, with the year-to-date pace now the most elevated since the 2009 Great Recession. As companies adopt new technologies and streamline operations, the labor market is shifting — and not evenly across sectors.
With inflation still hovering around 3%, delayed federal paychecks and reduced benefits in some assistance programs, many households are feeling increased financial strain. This is meaningful as we enter the holiday season, which typically accounts for nearly one-fifth of annual retail spending. Retail performance in November and December will be watched closely.
What We’re Watching Next
All eyes will be on Nvidia’s quarterly earnings report on Nov. 19. While the company is widely expected to exceed current-quarter expectations, the key question for investors is the outlook for 2026; specifically, demand for its next-generation Blackwell chips used to power large-scale AI computing environments.
If demand expectations remain strong, that could provide support to technology shares. If guidance signals a slowdown in infrastructure investment, volatility may continue.
Looking Ahead
Markets do not move in a straight line. Periods of strong performance are often followed by pauses or brief pullbacks. What matters most is whether the underlying economic and earnings picture remains supportive. At this stage, the broader environment continues to reflect resilience alongside adjustment.
At Elevage Partners, our focus remains consistent:
Short-term headlines will continue, as they always do. Our work is to look through them — and prepare, rather than react.
At Elevage Partners, we anticipate — we prepare.