Wall Street Plunges After AI Rally Fails, While Global Trade Bloc Seeks to Fortify Open Markets
London-UK, 2025-11-20
Global financial markets experienced significant turbulence and market mayhem on November 20, 2025, as a morning surge in US stocks, initially fueled by another stellar earnings report from AI giant Nvidia, completely collapsed.
This sharp reversal underscored deep-seated investor anxieties regarding AI bubble fears and elevated corporate valuations.
Concurrently, a major international trade body, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), held a crucial inaugural dialogue with the European Union (EU) in Melbourne, signaling a strategic push by major blocs to fortify open markets against the rising tide of protectionism.
This juxtaposition—volatile financial markets clashing with concerted efforts to stabilize global commerce—highlights the contradictory forces shaping the economic narrative of late 2025.
The Wall Street Whiplash: AI Euphoria Meets Valuation Reality
The day began with optimism following chipmaker Nvidia’s third-quarter earnings report, which once again significantly exceeded Wall Street expectations.
The company, the epicenter of the AI boom, reported record revenue, fueling early stock market gains across Asia and Europe. Japan’s Nikkei 225 surged 2.65%, and major European indices like the DAX in Frankfurt and the FTSE 100 in London also opened higher.
However, the momentum proved unsustainable, leading to a dramatic reversal in the US trading session. The initial excitement quickly gave way to profit-taking and renewed concerns that the valuations of AI-related firms have detached from fundamental reality.
• The S&P 500 erased its early gains and closed down 1.6%.
• The tech-heavy Nasdaq Composite plummeted 2.2%.
• The Dow Jones Industrial Average dropped 0.8%.
Nvidia’s stock, despite its blowout earnings, fell by 3.2%, becoming the heaviest drag on the broader market.
This “whipsaw” action points to extremely fragile market sentiment, where any positive news is fleetingly celebrated before macro risks, such as lingering inflation, high interest rates, and the possibility of an overvalued tech sector, reassert themselves.
The VIX, the measure of market volatility, climbed as investors sought to hedge against further sharp declines.
Global Trade: CPTPP and EU Seek Common Ground
In a powerful counterpoint to the market turmoil, major economic powers spent the day attempting to shore up the rules-based global trading system.
Ministers and representatives of the CPTPP (which includes nations like Canada, Japan, Australia, and the UK) and the EU held their inaugural Trade and Investment Dialogue in Melbourne, Australia.
The joint statement released today underscored a shared commitment to:
Rules-Based Trade:
Reaffirming that free and open markets are essential for future economic growth and security.
Supply Chain Resilience:
Strengthening global value chains and deepening the understanding of vulnerabilities, an implicit reference to recent geopolitical trade conflicts.
Combating Distortions:
Sharing concerns about market-distorting practices, economic coercion, and excess capacity—a clear signal directed at non-market economies.
Digital Commerce:
Recognising the growing significance of digital trade and the need to facilitate the cross-border transfer of data with appropriate safeguards.
This meeting signals an attempt by some of the world’s largest trading blocs to forge closer ties and create a united front against the increasing trend of protectionism and bilateral trade disputes.
The focus on transparency and predictability in trade rules is intended to build business confidence at a time when political tensions are making global commerce more risky and complex.
# Other Key Economic Highlights
On the monetary policy front, two central banks made key announcements:
# The South African Reserve Bank (SARB) reduced its policy rate by 25 basis points to 6.75%, citing an improved inflation outlook.
# The Central Bank of Egypt (CBE), however, decided to keep its key policy rates unchanged (with the Overnight Deposit Rate remaining at 21.00%), reflecting a commitment to stability despite high domestic inflation (Headline Inflation at 12.50%).
Meanwhile, major US retailer Walmart reported strong third-quarter earnings, beating expectations, and highlighting a focus on technology, leading its stock to climb despite the broader market decline.
# Headline Points for CJ Global Readers
# US Market Plunge:
Wall Street indices, led by the Nasdaq (-2.2%), suffered steep losses after an early rally sparked by positive Nvidia earnings collapsed, driven by fears over AI-led stock valuation bubbles.
# Global Trade Fortification:
The CPTPP and the EU held their inaugural trade dialogue in Melbourne, issuing a joint statement reaffirming their commitment to rules-based, open markets and strengthening supply chain resilience.
# Monetary Divergence:
The South African Reserve Bank cut its main interest rate, signaling confidence in its inflation outlook, while the Central Bank of Egypt held its rates steady to maintain monetary stability.
# Corporate Winners:
Retail giant Walmart posted strong Q3 results, offering a rare bright spot amidst the tech-sector volatility.
# High Volatility:
The dramatic “whipsaw” action in US trading underscores the extreme fragility and indecision currently gripping global financial markets.
