Market Stumbles as Major Averages Break Below 50-Day Moving Averages

The stock market stumbled on Monday as the recent momentum unwind finally caught up to the major averages, sending the S&P 500 (-0.9%), Nasdaq Composite (-0.8%), and DJIA (-1.2%) decisively below their 50-day moving averages for the first time since April.

The morning began with choppy action as both the S&P 500 and Nasdaq briefly slipped under their respective 50-day lines before staging a late-morning rebound. But the recovery didn’t hold. Renewed selling in the afternoon pushed all three benchmarks firmly through this key technical support zone, including the previously resilient Dow.

Once again, the pressure centered on the AI trade. NVIDIA (NVDA 186.60, -3.57, -1.88%) weighed on sentiment after news emerged that Peter Thiel’s fund, Thiel Macro LLC, fully liquidated its roughly 537,700-share position during Q3. The headline sparked a fresh wave of selling across semiconductor names, driving the PHLX Semiconductor Index to a 1.6% loss and extending the group’s month-to-date decline to 7.2%.

Weakness extended across the information technology sector (-1.4%), where Apple (AAPL 267.46, -4.95, -1.82%) slid following a Financial Times report suggesting CEO Tim Cook could step down as early as next year. Dell (DELL 122.48, -11.28, -8.43%) and Hewlett Packard Enterprise (HPE 21.23, -1.60, -7.01%) were among the sector’s worst performers after both were hit with downgrades from Morgan Stanley.

As the afternoon pullback intensified, losses became broad-based. Nine of the 11 S&P 500 sectors finished lower, with five falling more than 1.0%. Financials (-1.9%) led the downside as nearly all of its components traded in the red. American Express (AXP 341.25, -15.93, -4.46%) dropped sharply after reporting a small uptick in net write-offs in its October credit data. Meanwhile, Coinbase Global (COIN 263.95, -20.05, -7.06%) slumped as Bitcoin extended its recent slide, erasing the cryptocurrency’s year-to-date gains.

Still, there were pockets of strength. Communication services (+1.1%) was the clear standout after Alphabet (GOOG 285.60, +8.62, +3.11%) surged on news that Berkshire Hathaway disclosed a new $4.9 billion stake in the company. Utilities (+0.8%) also attracted inflows as investors sought defensive exposure.

Outside the megacap-heavy indices, the tone was even weaker. The Russell 2000 (-2.0%) and S&P Mid Cap 400 (-1.8%) suffered steeper declines as risk appetite dried up across smaller-cap areas of the market. The VIX spiked 14.3% to 22.67—its highest in weeks—signaling a marked uptick in investor unease.

On the macro front, the Fed continued to send mixed but generally cautious signals. Fed Vice Chair Philip Jefferson reiterated the need for a slow approach given the “evolving balance of risks,” while later in the session, Fed Governor Christopher Waller said he supports a December rate cut for risk-management reasons. That comment helped equities finish off session lows and nudged implied December cut odds slightly higher. The CME FedWatch tool now places the probability of a 25 bps cut at 44.9%, nearly unchanged from Friday.

Today’s retreat reflects a market still searching for direction as leadership rotates and investor sentiment recalibrates. The breakdown below the 50-day moving averages marks an important shift in the technical picture—one that hasn’t occurred since the April rebound began. With NVIDIA’s earnings and several key economic releases on deck later this week, the coming sessions will be pivotal in determining whether this pullback deepens or simply resets the market for another leg higher.

Our FTinvest 11 model portfolio came under meaningful pressure today, sliding 1.67% and finishing at 858.28 as the portfolio was pulled lower by broad market weakness and another session dominated by risk-off sentiment. The index spent nearly the entire day in negative territory, with early attempts at stabilization giving way to a deeper afternoon decline as selling accelerated across several of its key components.

While the broader market was already struggling under the weight of fading expectations for a December rate cut and continued volatility in tech, FTinvest 11 felt the impact of that shift more acutely. The portfolio’s growth-leaning names were hit hardest, mirroring the day’s pattern in which major averages briefly tried to reclaim technical support but ultimately rolled over into a steeper retreat.

A handful of stocks within the index attempted to hold their ground, but momentum was firmly against them as sentiment deteriorated through the session. No single component stood out as a clear driver of the loss; instead, the decline reflected widespread softness across most holdings. Defensive pockets of the market offered little relief, and there was no offsetting upside from the more resilient sectors that occasionally buoy FTInvest 11 on difficult days.

Despite the drawdown, the index remains comfortably above recent lows and well within its broader uptrend—though today’s move reinforces the more unsettled tone that has taken hold across markets this week. With several high-profile earnings reports and macro catalysts still ahead, volatility may continue to shape the near-term path, but FTinvest 11 enters the next session from a position of relative longer-term strength even as short-term pressures persist.