After several months of euphoria in technology stocks, the market is experiencing a marked reversal. NVIDIA, despite posting exceptional results, has failed to maintain investor confidence, triggering a broad pullback across tech equities. Sectors related to European defense have also come under pressure due to prospects of easing in the Ukraine–Russia negotiations. At the same time, the bond market remains relatively calm, with the U.S. 10-year yield below 4.15%, despite a reduced likelihood of further Fed easing. This combination of factors has heightened volatility, which is expected to remain elevated in the coming weeks.
Current Economic Environment
Increased volatility in technology stocks
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High valuations of major U.S. tech companies, despite positive results, are prompting precautionary selling.
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NVIDIA’s decline has had a domino effect across the sector.
Pressure on European defense stocks
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Prospects of peace talks between Ukraine and Russia have weighed on the sector.
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Investors are reassessing geopolitical risks and short-term defense budgets.
Bond market and monetary policy
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The U.S. 10-year yield remains below 4.15%.
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U.S. economic statistics, delayed by the shutdown, confirm a robust labor market.
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The probability of a Fed rate cut in December has decreased, adding to market nervousness.
Macro calendar to watch
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End of the quarterly earnings season → focus shifts to macroeconomic indicators and interest rates.
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Key upcoming releases:
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Producer prices and retail sales (September): November 25
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Durable goods orders: November 26
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Investment Recommendation
Strategy: “Selective accumulation on corrections”
Despite heightened volatility, these pullbacks present opportunities for patient investors. Technology and defense sectors remain supported by solid medium-term fundamentals.
Technology: an attractive long-term market
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Continued innovation and adoption of AI.
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NVIDIA and other leading U.S. tech companies hold dominant positions in strategic markets.
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Short-term corrections provide attractive entry points for long-term investors.
Defense: a geopolitical and strategic perspective
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Military demand in Europe remains strong despite ongoing negotiations.
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Current valuations may allow savvy investors to acquire positions at favorable levels.
Bonds and diversification
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Bond yields, though stable and low, provide risk diversification while remaining exposed to assets less correlated with equities.
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A balanced portfolio combining tech stocks, defense equities, and bonds reduces sensitivity to sharp market corrections.
Risks to Monitor
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Rebound in tech volatility and further correction.
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Developments in Ukraine–Russia negotiations.
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U.S. macro data stronger than expected → potential impact on monetary policy.
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Unexpected shocks in interest rates or bond markets.
Conclusion
Last week was marked by heightened nervousness and increased volatility, reflecting the market’s refocus on macroeconomic and monetary fundamentals. For patient investors, these turbulences can represent an opportunity to enter or gradually increase exposure to strategic sectors such as technology and defense, while maintaining a balanced allocation to bonds to limit risk.