Bitcoin Slide Deepens Market Selloff as Major Indexes Finish Sharply Lower

📺 Is the AI Bubble Finally Popping?

U.S. stocks slumped into the close Thursday as a late-session burst of selling extended an already bruising reversal across equities, commodities, and crypto. The Dow fell 386.51 points, or 0.84%, to 45,752.3, while the S&P 500 slid 103.40, or 1.56%, to 6,538.76. The tech-heavy Nasdaq bore the brunt of the pressure, tumbling 486.18 points, or 2.15%, to 22,270.0. The small-cap Russell 2000 shed 1.82% to finish at 229.17.

The synchronized decline capped a turbulent trading session that began with constructive macro signals but ended in the kind of broad, mechanical liquidation more characteristic of volatility spikes than normal profit-taking. Bitcoin added to the risk-off tone, dropping 3.32% to $86,425.66, deepening a multi-week slide.

The day’s narrative echoed the dynamics described in institutional research earlier this week, where upbeat earnings and macro data collided with structural fragilities in market positioning. Nvidia, whose runaway post-earnings rally helped propel futures higher overnight, became the epicenter of a dramatic reversal. Shares vaulted to $195 at the open on a quarter notable for “monster data center growth, margin stability, a Q4 guide that pulled estimates higher, and management commentary that effectively declared ‘this is not a bubble.’” But the surge quickly evaporated, with the stock sliding back to $181, a move that dragged the broader AI complex and high-beta sectors with it.

That reversal arrived alongside the type of stress indicators that often accompany forced selling. As detailed in the NYSE TICK readings flashed multiple, 1,000 to –1,200 prints, levels associated with sweeping institutional sell programs. The put/call ratio spiked to 1.20, its highest in two weeks, signaling traders scrambling for protection. Volatility measures confirmed the strain: the VIX hit 28.27, a recent high.

Federal Reserve commentary added unwelcome fuel. Governor Lisa Cook warned that vulnerabilities in Treasury-linked hedge fund strategies increased the likelihood of “outsized asset-price declines.” Chicago Fed President Austan Goolsbee flagged “possible bubble dynamics” in AI investment and said that slowing hiring and unsettled inflation were complicating the Fed’s efforts to read the business cycle—particularly during what he described as the “lights going out” period of federal data blackout. The tone, noted the analysis, was “hardly the rhetoric that fuels melt-ups.”

Those remarks landed in a market already grappling with historically high concentration risk. With the top ten S&P 500 stocks comprising roughly 40% of the index, Nvidia’s failure to sustain its earnings breakout acted as a pressure point.

One strategist put the dilemma succinctly. Jeffrey Favuzza of Jefferies asked: “If NVDA can’t work on that magnitude of beat and raise, what does that mean for the broader AI trade?”

Meanwhile, Bitcoin’s slide played into a broader reassessment of risk across crypto markets. Bitcoin has fallen 24% from its October all-time high, erasing year-to-date gains. Yet the asset remains up 1200% since 2020, reflecting a pattern in which deep drawdowns and sharp recoveries coexist. Volatility remains extreme—roughly 3× that of the S&P 500 and 4× that of gold—and correlations with equities have turned “significantly positive,” reducing diversification benefits just when investors seek them most.

Energy and metals didn’t offer refuge. Crude oil futures slipped 0.86% to $58.74, while gold ticked 0.18% lower to $4,075.40.

Thursday’s session underscored a market struggling to reconcile strong fundamentals with fragile positioning. Whether the day’s reversal marks exhaustion or the start of a deeper repositioning will depend on whether volatility abates and AI leaders regain their footing.