Nasdaq Plunges Over 400 Points as Fear & Greed Index Hits Extreme Fear Territory

This analysis is based on the Benzinga report [1] published on November 7, 2025, which documented a significant market decline and deteriorating investor sentiment.

The November 6, 2025 trading session witnessed a substantial market correction, with the technology-heavy Nasdaq Composite Index experiencing the steepest decline among major indices, falling 400+ points (1.90%) to close at 23,053.99 [0][1]. The broader market followed suit, with the Dow Jones Industrial Average declining 399 points to 46,912.30 (-0.73%) and the S&P 500 dropping 1.12% to 6,720.32 [0][1].

Technology stocks led the decline, particularly AI-linked companies that have been market leaders in recent months. Notable decliners included Robinhood Markets (HOOD) plunging more than 10% despite beating earnings expectations, Palantir Technologies (PLTR) falling 6.32%, Advanced Micro Devices (AMD) declining 6.88%, and Qualcomm (QCOM) dropping 3.29% despite topping estimates [1].

Sector performance revealed clear divergence, with most S&P 500 sectors closing negatively. The worst performers were Industrials (-2.28%), Consumer Cyclical (-2.13%), Financial Services (-1.82%), and Technology (-1.58%) [0]. However, defensive sectors showed resilience, with Healthcare (+0.45%) and Real Estate (+0.09%) bucking the downward trend [0].

The market decline was exacerbated by concerning economic data, particularly labor market indicators. U.S.-based employers announced 153,074 job cuts during October, a sharp increase from 54,064 in the previous month [1]. This significant deterioration in employment prospects contributed to investor anxiety about economic growth trajectories.

The CNN Money Fear and Greed Index’s movement to “Extreme Fear” territory at 23.6 (down from 30.2) represents a substantial deterioration in market sentiment [1]. This index, calculated from seven equal-weighted indicators ranging from 0 (maximum fear) to 100 (maximum greed), typically signals that investors are overly pessimistic when below 25, potentially creating contrarian opportunities.

Trading volume data confirmed heightened market concern, with Nasdaq volume reaching 9.75 billion shares, significantly elevated compared to recent averages [0]. The S&P 500 recorded 6.05 billion shares in volume, while the Dow Jones saw 552 million shares trade hands [0]. The Russell 2000 small-cap index also declined 1.68%, indicating that selling pressure extended beyond large-cap technology stocks to broader market segments [0].

The disproportionate impact on technology stocks, particularly AI-related companies, suggests sector-specific concerns beyond general market weakness. The fact that some companies beating earnings expectations still experienced significant declines (Robinhood, Qualcomm) indicates that valuation concerns may be overriding fundamental performance [1]. This pattern suggests that after a strong rally in October 2025, technology stocks may have been vulnerable to profit-taking, especially given high valuation multiples in the AI sector.

The outperformance of Healthcare and Real Estate sectors during a broad market decline indicates a classic flight to safety pattern [0]. This sector rotation suggests that institutional investors may be repositioning portfolios away from growth stocks toward more defensive positions, potentially anticipating economic headwinds or seeking to preserve capital during heightened volatility.

The “Extreme Fear” reading of 23.6 on the Fear & Greed Index historically has often coincided with market bottoms, though this pattern is not guaranteed [1]. The combination of significant price declines, elevated trading volume, and extreme fear readings suggests the market may be entering a short-term capitulation phase, which could present opportunities for strategic investors with appropriate risk tolerance.

1. Valuation Correction Risk
   : Technology stocks, particularly AI-related companies with high multiples, face continued pressure if investors perceive valuations as stretched relative to growth prospects [1].

2. Economic Slowdown Concerns
   : The sharp increase in job cut announcements could signal weakening economic conditions that may impact corporate earnings and consumer spending [1].

3. Geopolitical Technology Tensions
   : Recent developments regarding U.S.-China technology restrictions, particularly concerning AI chips, may be contributing to sector-specific volatility and uncertainty [2].

1. Contrarian Entry Points
   : The “Extreme Fear” reading suggests that quality companies may be available at discounted prices, particularly those with strong fundamentals that have been sold off indiscriminately.

2. Defensive Sector Strength
   : Healthcare and Real Estate’s resilience during the decline indicates potential for continued outperformance if market uncertainty persists [0].

3. Strategic Accumulation
   : For long-term investors, the market decline may present opportunities to establish or increase positions in high-quality technology companies at more reasonable valuations.

• Fear & Greed Index Trajectory
  : Whether the index remains in “Extreme Fear” territory or shows signs of stabilization [1]
• Upcoming Technology Earnings
  : Reports from major tech companies could set sector direction and influence broader market sentiment
• Federal Reserve Policy Indications
  : Any signals regarding monetary policy shifts that could impact growth stock valuations
• Institutional Flow Patterns
  : Monitoring for signs of institutional accumulation or distribution in key sectors
• Volatility Index (VIX) Levels
  : Trends in market fear indicators to gauge near-term market direction

The November 6, 2025 market decline represents a significant correction driven by technology sector weakness, deteriorating economic indicators, and heightened investor fear. The Nasdaq’s 400+ point decline, combined with the Fear & Greed Index’s move to “Extreme Fear” territory, signals a shift in market sentiment from optimism to caution [0][1]. While defensive sectors showed resilience, the broad-based nature of the decline and elevated trading volume suggest that investors should remain vigilant about potential continued volatility.

The combination of valuation concerns in technology stocks, weakening labor market indicators, and geopolitical uncertainties creates a complex risk environment that warrants careful monitoring of key indicators and selective consideration of opportunities that may arise from the market correction.