US Indices Extend Four-Day Decline Amid AI Valuation, Fed Policy, and Japan Fiscal Risks

On November18, 2025, US indices continued their four-day decline, driven by three interconnected factors: AI valuation worries, Federal Reserve policy uncertainty, and Japan’s fiscal risks [1]. Over the prior four trading days (Nov12-17), the Dow Jones (-1.02% on Nov17), S&P500 (-0.61%), and Nasdaq Composite (-0.35%) all posted consecutive declines [0]. This weakness spilled over globally: Japan’s Nikkei 225 fell by3% (midday Nov18) due to tech selling and fiscal concerns, while South Korea’s Kospi dropped by3.3% and Taiwan’s Taiex by2.5% [2][5]. Tech stocks led losses—Nvidia (NVDA) down1.88%, Apple (AAPL) down1.82%, Tokyo Electron down5.4%—as investors questioned AI-related valuations [2][3][6]. Japan’s fiscal issues, including a30-year JGB yield surge to3.31% and yen weakening to155 against USD, added to global bond market concerns [3][5]. Fed policy uncertainty, fueled by delayed jobs data and cautious rate cut stances, amplified volatility [5][6].

##2. Key Insights

• Cross-Domain Spillover
  : AI valuation concerns affected both US and Asian tech stocks, with Japan’s AI-related stocks dropping15% monthly [4]. Japan’s fiscal policy changes (increased spending, delayed debt reduction) impacted global bond yields and currency markets, linking regional fiscal risks to global asset prices.
• Interconnected Risks
  : Fed policy uncertainty compounded risk-off sentiment from AI and Japan’s fiscal issues, creating a feedback loop that pressured both equities and crypto (Bitcoin down1.33% to $90,879 [0]).

##3. Risks & Opportunities

• AI Valuation Correction
  : Tech stocks’ sustained declines suggest investors are re-evaluating AI-related growth expectations; Nvidia’s upcoming earnings will be a critical sentiment indicator [3][6].
• Japan’s Debt Risks
  : Rising JGB yields could trigger a broader global bond sell-off, while the yen’s weakness (155 vs USD) may lead to currency intervention [3][5].
• Fed Policy Delay
  : Delayed rate cuts and uncertain economic data (due to government shutdown) may prolong market volatility [5][6].

No explicit opportunities were identified in the analysis; investors should monitor key events (Nvidia earnings, US jobs data, Japan’s fiscal announcements) for potential market shifts.

##4. Key Information Summary

• US Indices
  : Dow (-1.02% Nov17), S&P500 (-0.61% Nov17), Nasdaq (-0.35% Nov17) [0].
• Tech Stocks
  : NVDA (-1.88%), AAPL (-1.82%) [2][3].
• Crypto
  : Bitcoin at $90,879 (-1.33% Nov18) [0].
• Japan
  :30-year JGB yield (3.31%), Nikkei (-3% Nov18) [3][5].
• Global
  : Asian markets down2.5-3% amid tech and fiscal concerns [2][5]