Markets News, Nov. 7, 2025: Nasdaq Posts Worst Week Since 'Liberation Day'; Tesla Stock Falls After Vote on Musk's Pay

U.S. equities concluded a three-week winning streak with weekly losses across major indexes, including a 3% drop for the Nasdaq, despite Friday's rebound fueled by hopes for an end to the government shutdown. Weakening labor market data, including 150,000 October layoffs, is increasing investor confidence in a potential Fed rate cut, while consumer sentiment hit its lowest since June 2022. Key corporate movements included Tesla's 4% decline post-Musk pay package approval, Block's 8% slump on an earnings miss, and Take-Two's 8% drop due to a "Grand Theft Auto VI" delay, while Expedia surged over 17% on strong domestic demand and raised guidance. Separately, BCA Research recommended a long-short AI strategy, favoring Asian chipmakers over U.S. hyperscalers, citing concerns over capital allocation and future data center obsolescence.

Analysis

U.S. equity markets concluded a three-week winning streak with weekly declines across major indexes, including a 3% drop for the Nasdaq, despite Friday's rebound on government shutdown hopes. The 38-day shutdown significantly impacted consumer sentiment, falling to its lowest since June 2022, and delayed labor data; private reports of over 150,000 October layoffs fuel expectations for a third Federal Reserve interest rate cut next month.

Corporate performance was mixed: Take-Two Interactive (TTWO) tumbled 8% after another "Grand Theft Auto VI" delay, overshadowing an improved earnings outlook, while Block (XYZ) slumped 8% on a Q3 earnings miss and rising G&A costs. Tesla (TSLA) fell nearly 4% following approval of CEO Elon Musk's pay package. Conversely, Expedia Group (EXPE) surged over 17% after beating profit expectations and raising annual revenue guidance on strong domestic demand, and Akamai Technologies (AKAM) gained nearly 15% on robust Q3 earnings and an improved outlook.

BCA Research presented a long-short AI investment strategy, recommending long positions in Korean and Taiwanese chipmakers (e.g., TSM) while shorting U.S. hyperscalers. This thesis cites concerns that hyperscalers' massive AI infrastructure investments, projected at over $400 billion this year, could lead to misallocated capital and declining return on equity, contrasting with the more favorable profile of Asian semiconductor manufacturers.

Key Decisions for Investors

• Monitor upcoming labor market data and Federal Reserve communications closely, as weakening employment figures could accelerate interest rate cut expectations, impacting bond yields and equity valuations.
• Evaluate the BCA Research long-short AI thesis by assessing the capital allocation efficiency and return on equity trends of U.S. hyperscalers versus the valuation and growth prospects of Asian semiconductor manufacturers.
• Re-evaluate positions in companies facing specific headwinds like delayed product releases (TTWO) or earnings misses (XYZ), while considering opportunities in companies demonstrating strong demand and raised guidance (EXPE, AKAM).