Valuation worries, record-long government shutdown hang over markets: What to watch this week

After another jam-packed week of news and earnings, the earnings and economic calendar suggests a tamer five-day stretch awaits investors in the week ahead.

Tech stocks this past week had one of their worst stretches of the year, with declines in Palantir (PLTR) and Nvidia (NVDA) leading the tech-heavy Nasdaq to a 3% decline. The index posted its worst week since "Liberation Day," despite staging a late-session comeback on Friday. The S&P 500 (^GSPC) fell 1.7% for the week, and the Dow (^DJI) lost closer to 1.3%.

The US government shutdown, which officially became the longest on record last week, is poised to extend into a sixth week. And while the shutdown continues to crimp official US government economic data releases, private industry sources showed the shutdown's impact weighing on the outlook.

US consumer sentiment plunged in November, reaching a three-year low as Americans feared the government shutdown’s effects on the economy and their personal finances. Private data released last week also showed that October job cuts hit their highest level for the month since 2003.

Read more: How the government shutdown affects your student loans, Social Security, and more

In the week ahead, investors will get the last major burst of reports for third quarter earnings season, with CoreWeave (CRWV), Oklo (OKLO), and Rocket Lab (RKLB) representing the tech sector. The market will also get results from The Walt Disney Company (DIS), Paramount Skydance (PSKY), Brookfield Corporation (BN), and a range of other companies.

On the economic data side, the ongoing government shutdown is likely to delay the Bureau of Labor Statistics' Consumer Price Index and Producer Price Index reports, which would have headlined the week's data, as well as retail prices and jobless claims data.

That leaves a very light week for investors on the data front. The National Federation of Independent Business's small business optimism index and mortgage application data from the Mortgage Bankers Association will lead the stretch.

Yahoo Finance's virtual Invest event will also kick off live at 8 a.m. ET on Thursday, Nov. 13, with a loaded guest lineup set to feature interviews and discussions from the likes of Pfizer (PFE) CEO Albert Bourla, Starboard Value CEO Jeff Smith, former Federal Reserve Vice Chair Lael Brainard, and Robinhood (HOOD) CEO Vlad Tenev, among others. Yahoo Finance

'This requires continued revenue growth'

The world's leading Big Tech companies have gone all-in on artificial intelligence. And investors have gone all-in on their stocks, pushing valuations to new highs.

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But questions about whether the growth required to back these valuations is sustainable have been picking up.

"This is what markets are grappling with — the excitement surrounding how impactful (and ideally profitable) these technologies could be in the future, tempered by the concern that the expectations implied by current valuations are too high," Thomas Shipp, head of equity research at LPL Financial, wrote in an email.

This past week's sell-off was a sign of growing investor nervousness. Nvidia lost more than 7% over the five-day period — its worst weekly performance in more than a year — while fellow "Magnificent Seven" names Meta (META) and Microsoft (MSFT) each lost over 4%.

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In recent weeks, concerns from analysts and investors alike have surfaced around the "circular" nature of investments between the world's leading AI companies.

Nvidia signed a $6.3 billion deal with AI data center firm CoreWeave (CRWV), a customer of the chipmaker in which Nvidia holds a 7% equity stake. There's Nvidia's reported $2 billion investment linked to its customer xAI (XAAI.PVT). OpenAI (OPAI.PVT) has signed deals with Oracle (ORCL), CoreWeave (CRWV), and chipmaker Advanced Micro Devices (AMD). Last month, the ChatGPT maker tapped Broadcom (AVGO) to build its first in-house AI processors.

"These investments could be interpreted as a vote of confidence that the users downstream will crack the profitability code, and an investment that reflects the desire to participate in the resulting growth," Shipp wrote. "A more pessimistic take would be that this circular financing is being used to buttress the financial position of unprofitable business lines to maintain demand for chips."

Investors have also noted concerns around just how much money these companies are going to have to spend to hit the lofty targets they're pronouncing.

In one example, shares in Meta fell more than 10% at the tail end of October after the company said in its third quarter earnings report that it planned to boost its AI capital expenditures higher than investor forecasts.

When OpenAI chief Sam Altman weighed in on comments from the company's CFO that had originally seemed to suggest OpenAI was looking for government subsidies for its development, he talked up "commitments of about $1.4 trillion over the next 8 years," even as OpenAI remains unprofitable.

"Obviously," the AI leader wrote, "this requires continued revenue growth."

One of the key risks in underspending, tech leaders say, is that the US could cede its position as the global AI leader to China. Just as US companies have been plowing money into chipmaking and AI developments, so too has Beijing.

Earlier this week, Nvidia chief Jensen Huang, who leads the world's leading chipmaker and most valuable company, told the Financial Times that "China will win the AI race" if Chinese access to Nvidia's top-of-the-line Blackwell chips remains closed, preventing the American company from supplanting Chinese chipmakers.

Huang doubled down with an X post on Wednesday night, writing, "As I have long said, China is nanoseconds behind America in AI. ... It's vital that America wins by racing ahead and winning developers worldwide."

Nvidia is scheduled to report third quarter earnings on Nov. 19 after the market close.OpenAI CEO Sam Altman speaks at OpenAI DevDay in San Francisco on Oct. 6, 2025. (Benjamin LEGENDRE / AFP via Getty Images)·BENJAMIN LEGENDRE via Getty Images

Fast slowdown for fast casual

Fast food is having a tough month.

Papa John's (PZZA) saw its shares plummet by more than 20% after the private equity firm Apollo Global Management (APO) backed away from a $2.2 billion deal to take the pizza chain private. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

As of a statement released Tuesday, the owner of Papa John's competitor Pizza Hut, Yum! Brands (YUM), is now exploring options for a deal that would take Pizza Hut private. Pizza Hut posted its eighth straight quarter of sales declines, down 1%, in Yum! Brands' most recent earnings report.

The pain among the pizza dealers isn't unique, as the macro environment has been hammering fast-casual dining companies.

In a note to clients published in October, analysts at TD Cowen lowered their price targets for a range of fast-casual companies, including Cava (CAVA), Dutch Bros (BROS), Shake Shack (SHAK), and Starbucks (SBUX), pointing to an "over-indexing" of its 18- to 24-year-old customers who are facing increasing macroeconomic pressures and are likely to cut back on fast food spending.

Case in point: At the end of October, Chipotle (CMG) cut its full-year sales outlook for the third straight quarter, citing a wide range of economic headwinds facing the chain's customers.

On the company's earnings call, CEO Scott Boatwright said that Chipotle saw a "broad-based pullback in frequency across all income cohorts." In particular, Boatwright said, the company saw the largest loss in two customer groups: Those with household incomes under $100,000 per year, and "a particularly challenged cohort is the 25- to 35-year-old age group ... facing several headwinds including unemployment, increased student loan repayment and slower real wage growth."

Companies, including Cava and Sweetgreen (SG), echoed this view in results posted this week.

Young people who can't afford a casual bowl anymore are becoming the dominant economic meme as we round out 2025.

Not all chains, however, are under pressure.

McDonald's (MCD) last week disclosed US same-store sales that beat forecasts for a second straight quarter, with the company trumpeting its value offerings in what it called a "challenging environment."

On its earnings call with investors, McDonald's said it has seen particularly strong growth among higher-income consumers. Good news if you're selling an $8 value meal; a more challenging story if you sling $16 salads.Street logo signs of the American multinational fast food hamburger restaurant chain, McDonald's, and Pizza Hut in Hong Kong. (Sebastian Ng/SOPA Images/LightRocket via Getty Images)·SOPA Images via Getty Images

Economic and earnings calendar

Monday

Economic data:No notable economic data.

Earnings calendar: Barrick Mining (B), CoreWeave (CRWV), Occidental Petroleum (OXY), Rocket Lab (RKLB), AST SpaceMobile (ASTS), Tyson Foods (TSN), Venture Global (VG), Paramount Skydance (PSKY), Rigetti Computing (RGTI), Tower Semiconductor (TSEM), Maplebear (CART), Metsera (MTSR), TeraWulf (WULF), Plug Power (PLUG), eToro (ETOR), Gemini Space Station (GEMI)

Tuesday

Economic data: NFIB small business optimism, Oct. (98.8 previously)

Earnings calendar: Sony (SONY), Sea Limited (SE), Alcon (ALC), AngloGold Ashanti (AU), Vodafone Group (VOD), Oklo (OKLO), Fermi (FRMI)

Wednesday

Economic data: MBA mortgage applications, week ended Nov. 7 (-1.9% previously)

Earnings calendar: Cisco Systems (CSCO), TransDigm (TDG), Manulife (MFC), Flutter Entertainment (FLUT), Tencent Music Entertainment (TME), ORIX Corporation (IX), Circle (CRCL), GlobalFoundries (GFS), Pan American Silver Corp (PAAS), Ascendis Pharma (ASND), On Holding (ONON), Firefly Aerospace (FLY), McGraw Hill (MH)

Thursday

Economic data:No notable data expected due to the US government shutdown.

Earnings calendar: The Walt Disney Company (DIS), Applied Materials (AMAT), Brookfield (BN), Nu Holdings (NU), JD.com (JD), Dillard's (DDS), Figure Technology Solutions (FIGR), StubHub (STUB), TMC (TMC), Better Home & Financing (BETR)

Friday

Economic data: No notable data expected due to US government shutdown.

Earnings calendar: Alibaba (BABA), Mitsubishi UFJ Financial (MUFG), Sumitomo Mitsui Financial (SMFG), Mizuho Financial (MFG), LATAM Airlines (LTM), Spire (SPIR), American Bitcoin (ABTC), Legence (LGN), Quantum Computing (QUBT), Perpetua Resources (PPTA)

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