US Stocks Face Three Major Macro Headwinds; Valuation Risks for Tech Stocks Intensify

This analysis is based on an alert post [1] published by Xueqiu on November 13, 2025, which points out that US stocks face significant downward pressure, especially in the tech sector. The current market environment shows a pattern of convergence of three major macro headwinds:

Market data [0] shows that the Russell 2000 Index has fallen 4.05% over the past 30 trading days. Small-cap stocks coming under pressure first are often a precursor to systemic risks. Mark Zandi [4], chief economist at Moody’s, warned that AI contributes only 0.63 percentage points to US economic growth, while deglobalization will reduce US real GDP growth by 1.19 percentage points, making it unlikely for the US to avoid a recession in the next year.

There are serious divisions within the Fed regarding a December rate cut [2]: Collins, the hawkish Boston Fed President, stated that the threshold for further rate cuts is “relatively high”, while Milan, the dovish Fed Governor, advocated for a continued 50 basis points rate cut. CME data shows that market expectations for a December rate cut range from 59.4% to 66.9%. This policy uncertainty puts pressure on high-valued growth stocks.

AI investments show typical characteristics of high input and low returns [3]: OpenAI’s annual recurring revenue is $13 billion, but its expenditures exceed $26 billion; the company has committed to investing $1.4-1.5 trillion in the future. The total valuation of seven top private tech companies reaches $1.3 trillion, doubling in the past year, indicating significant valuation bubble risks.

Major tech stocks have high valuation levels [0]: Apple P/E 36.47, NVIDIA P/E 54.18, Microsoft P/E 36.23. Amid expectations of slowing earnings growth, high valuations face the risk of a sharp correction, potentially forming a “Davis Double Kill” of earnings and valuation.

Although the S&P 500 remains basically flat (+0.00%), sector differentiation is severe [0]: the tech sector rose 2.03%, communication services fell 2.22%; defensive sectors performed strongly (utilities +2.16%, energy +3.11%), indicating that investors’ risk appetite has declined and they are shifting to defensive assets.

The current market environment is highly similar to the eve of historical bubble bursts: valuation-earnings growth mismatch, increased monetary policy uncertainty, bubble in technological innovation investments, and small-cap stocks falling first. These historical patterns usually signal a major market adjustment.

1. Valuation Risk
   : Tech stocks generally have high P/E ratios, facing the risk of sharp corrections when earnings growth slows
2. Policy Risk
   : Intensified internal divisions within the Fed; the outcome of the December monetary policy meeting may trigger violent market fluctuations
3. Liquidity Risk
   : The high leverage nature of AI investments may trigger a chain reaction, affecting the entire tech sector
4. Systemic Risk
   : The Russell 2000 Index has begun to come under pressure, potentially预示ing a broader market correction

It is recommended to focus on: VIX Fear Index, changes in 10-year US Treasury yields, earnings expectations of tech giants, Fed policy statements, and cash flow status of AI-related companies.

The December Fed monetary policy meeting will be a key turning point; policy trends will directly affect the performance of high-valued growth stocks. At the same time, the upcoming earnings season will test the actual situation of downward revisions to corporate earnings expectations.

Market data shows a convergence of multiple risk signals: small-cap stocks have begun to fall (Russell 2000 -4.05%), tech stocks have high valuations (NVDA P/E 54.18), Fed policy divergence has intensified, and AI investments show bubble characteristics. These factors collectively point to significant downward pressure on US stocks, especially the tech sector.

Historical patterns indicate that when there is a valuation-earnings growth mismatch, increased monetary policy uncertainty, bubbles in technological innovation investments, and small-cap stocks fall first, the market usually experiences a major adjustment. Investors should remain cautious and closely monitor changes in key risk indicators.