It’s been a tough Thursday on Wall Street. By midday, all three major stock indexes — the Dow Jones, Nasdaq, and S&P 500 — were drenched in red ink, falling between 1.3% and 2.2%.
The only thing climbing today? The VIX, better known as Wall Street’s “fear gauge.” By around 2 p.m. Eastern, it had jumped nearly 20%, signaling that traders are bracing for more turbulence ahead.
The Return of Fear in the Market
The Volatility Index (VIX) measures how wild investors expect the next 30 days in the market to be, based on S&P 500 options prices. When it rises sharply, it usually means nerves are running high — and that’s exactly what’s happening now.
This sudden spike shows investors aren’t as sure about the stock market’s AI-fueled rally as they once were. Some of the biggest names in finance are starting to back away from the party.
Big Short Investor Sounds the Alarm
Among the loudest voices of concern is Michael Burry, the famed investor who predicted the 2008 housing collapse. Recent filings show he’s now taken a large short position against Nvidia, betting the chipmaker’s sizzling run can’t last forever.
Adding to the unease, Masayoshi Son — the tech billionaire behind SoftBank — disclosed this week that he quietly sold off all his Nvidia holdings and a big chunk of his stake in T-Mobile last month.
To many on Wall Street, those moves look like flashing red lights that the AI boom — which helped power record highs for Nvidia, Microsoft, and Palantir — may finally be losing momentum.
Tech Giants Lead the Slide
The Nasdaq, which kicked off the week looking strong, is now staring down a third consecutive day of losses. Tech heavyweights like Nvidia, Broadcom, and Alphabet are leading the retreat as investors pull cash from the AI sector that’s dominated 2025.
Some traders believe this isn’t panic — just the market taking a well-needed breather after months of relentless tech gains.
“This looks like a natural consolidation,” said Ron Albahary, chief investment officer at Laird Norton Wealth Management, in an interview with CNBC. “At some point, all this capital expenditure will actually start to show returns.”
Broader Sell-Off Spreads
But it’s not just tech names taking a hit today. Companies far outside the AI spotlight are also feeling the pain as Wall Street resets expectations for interest rate cuts.
Just yesterday, traders were giving a 63% chance that the Federal Reserve would trim rates in December. Today, those odds plunged to below 50%, according to CME Group data.
Lower rates tend to lift stocks because they make borrowing cheaper — both for corporations funding expansion and for consumers spending more freely. But if cuts are delayed, it could keep pressure on markets into the new year.
What’s Next for Investors
For now, the market mood is edgy but not chaotic. Analysts say some volatility was inevitable after the record-setting AI run-up that defined much of 2025.
Still, with heavyweights like Burry and Son stepping back and the Fed signaling caution, investors may be in for a bumpy finish to the year.
This story is developing — and Wall Street will be watching closely to see whether Thursday’s slide is a short-term scare or the start of something bigger.