U.S. stock markets closed sharply lower on Thursday, extending recent losses as investors grew increasingly wary of high valuations in the artificial intelligence sector. The tech-heavy **Nasdaq Composite** led the decline, tumbling 1.9%, while the **S&P 500** shed 1.12% and the **Dow Jones Industrial Average** fell 397 points, or 0.8%.
The S&P 500 is now testing key technical levels, with an island reversal pattern suggesting a potential trend reversal. The index is holding above its 50-day moving average, which has so far provided a floor for the market. However, market breadth remains poor, with a narrowing group of stocks driving performance.
Despite the sell-off, stock futures are pointing to a slightly higher open on Friday. However, analysts remain cautious, citing stretched valuations and less-than-ideal entry points for intermediate-term investments.
**Dollar Finds Footing as Markets Grapple with Uncertainty**
In the forex market, the U.S. dollar has rebounded after a sharp decline on Thursday. The **dollar index (DXY)** is trading around 99.796, up 0.1% on the day. The greenback’s recovery comes as weaker-than-expected trade data from China has cast a chill over Asian markets.
The dollar’s recent volatility has been driven by shifting expectations around Federal Reserve policy. With the U.S. government shutdown delaying the release of key economic data, including the non-farm payrolls report, traders are relying on private sector data to gauge the health of the economy. Recent private-sector reports have shown a cooling labor market, leading to increased bets on a Fed rate cut in December.
Chicago Fed President Austan Goolsbee has urged caution, however, stating that the lack of official data makes it difficult to assess the economic outlook. “When it’s foggy, let’s just be a little careful and slow down,” he said in a recent interview.
**Key Market Data**
| Market | Level | Change |
| :— | :— | :— |
| S&P 500 | 6749 | -1.12% |
| Dow Jones | 34,380 | -0.8% |
| Nasdaq | 15,000 | -1.9% |
| Dollar Index (DXY) | 99.796 | +0.1% |
| EUR/USD | 1.1535 | -0.1% |
| GBP/USD | 1.31195 | -0.2% |
| USD/JPY | 153.27 | +0.2% |
**Today’s Outlook**
Investors will be closely watching for any further signs of a slowdown in the U.S. economy, which could increase pressure on the Federal Reserve to cut interest rates. The ongoing uncertainty surrounding the government shutdown and the lack of official economic data are likely to keep markets on edge.
In the stock market, the focus will remain on the tech sector and the performance of AI-related stocks. In the forex market, the dollar’s direction will likely be driven by incoming data and comments from Fed officials.
**References**
[1] [Stock Market Outlook for November 7, 2025](https://equityclock.com/2025/11/06/stock-market-outlook-for-november-7-2025/)
[2] [Dollar rebounds as China trade data disappoints](https://www.reuters.com/world/asia-pacific/dollar-defensive-data-show-cracks-us-jobs-market-2025-11-07/)
