Update One stock does not a market make Nov 22 2025

A Single Stock does not a Market make. 

The last few weeks gave rise to a ferocious collapse in the artificial intelligence (AI) stocks. Not to blow my own horn, but I had forecast this AI blowup in my August 22, 2025 article entitled “Another Bubble”.

It took about two months for that forecast to come true and the rout was fast and furious. The weakness in the AI sector took down the general market with it. Last week, one of the last big boy stocks in AI, NVIDIA, was due to post earnings November 19^th after market close and the market cheerleaders virtually rested the hopes of stopping the market fall on what NVDIA posted.

NVDIA then posted stellar earnings and almost the entire market screamed upwards the next day. I thought: “One company posts earnings and the entire markets is now fine?”.

Not buying it and stated as such. Mid-day, the market reversed and hammered down again.

So much for the power of one stock. For anyone to think one stock could cure all market ills was idiotic and it only took a few hours to prove that out in spades.

There is one entity that can move the market, however, and it the Federal Reserve that can do just that.

On November 21^st, a Federal Reserve board member commented as such that an interest rate cut could be in the cards. This was contrary to the previous hints that the Federal Reserve had made in the previous weeks that another cut may not be forthcoming.

Wham and voila.

The market screamed upwards on last Friday over 700 Dow points. It ended up down a bit from the high but still at an eye-popping plus 493 points.

The question then becomes: “Is the market rational and it is all clear sailing from here on in?”

Quite simply and in my opinion, no.

The markets reactions to both NVIDIA and the Federal Reserve’s comment is not rational, at least in this analyst’s opinion.

First off, the earnings of one company should not move an entire sector, let alone entire swaths of unrelated market sectors.

Secondly, it is a sad commentary on where the market stands as a whole when a single monetary policy comment sends a market bouncing like a super ball, whether up or down.

But we have seen this movie before.

Whereas the stock markets of the past have moved when the business climate was strong and/or improving, now market participants load up on stocks when credit is eased by an interest rate cut.

In English, it means let’s print up some more money, lend it out and watch the markets run. Never mind the economic truths which currently are that the consumer is struggling, inflation is still running rampant and will continue to do so (my opinion) and the U.S. dollar is slowly, and has been for decades, migrating itself into a Mexican Peso moment, which is becoming more and more worthless with every passing day.

I know many think this will all blow over, the U.S. will continue to lead the economic world, inflation will subside, business will remain strong and it will never rain again. The two political parties will eventually join hands and sing Kumbaya, the nations of the world will settle all their differences and wars will end, we will all go back to paying lower taxes, our healthcare problems will evaporate and a new wave of new businesses will spring up, ensuring that everyone has a good paying job.

And how many of us believe all that because the Federal Reserve might drop interest rates?

Bridge for sale.

PM me.