Key takeaways:
Disney and other consumer names disappointed on earnings, adding pressure to markets after the prolonged US government shutdown.
Analysts see no sign of insider-driven Bitcoin selling, with BTC instead reflecting wider doubts about valuations and US economic stability.
The tech-heavy Nasdaq Index fell 2.3% on Thursday after Palantir CEO Alex Karp made cautious remarks about the profitability of the artificial intelligence sector. In an interview at Yahoo Finance’s Invest event, Karp said not every AI implementation will “create enough value to justify the actual cost.” Investors fear the US economy may be entering a weaker phase.
Shares of Palantir (PLTR), Intel (INTC) and CoreWave (CRWV) posted daily losses of 6% or more. Bitcoin (BTC) followed the broader risk-off move, trading down 6.5% after testing the $105,000 level on Wednesday. The pullback sparked $350 million in liquidations of leveraged bullish BTC positions, likely contributing to the loss of the key $100,000 psychological support.
There is little evidence that traders are specifically worried about Bitcoin or that any major event triggered additional fear or uncertainty. Analysts emphasize that the recent sell pressure does not support the narrative that Bitcoin insiders are cashing out. According to PlanB, the creator of the stock-to-flow metric, the long-term supply pressure originated from holders who were active between 2017 and 2022.
AI build-out cost and US macroeconomic issues worry investors
Tesla (TSLA) stock deepened its decline after the company was forced to recall more than 10,500 units of its self-consumption energy storage system. At least 22 overheating reports linked to the $8,000 device, manufactured in the US, prompted the preventive action. TSLA had already been under pressure after outlining plans to build a 10 million-unit Optimium humanoid robot line in Austin.
Beyond the AI sector, traders lowered their expectations for the US Federal Reserve’s monetary policy path. According to the CME FedWatch Tool, the implied odds of the Fed cutting interest rates below 3.5% by January 2026 slipped to 20%, down from 49% on Oct. 13. Analysts note the Fed’s main concern remains sticky inflation, which continues to hit lower-income workers hardest, according to Yahoo Finance.
US President Donald Trump signed a temporary government funding bill to end the shutdown, but White House Press Secretary Karoline Leavitt said on Wednesday that some October economic reports might not be published. Former Fed vice chair Lael Brainard warned that AI investments are masking cracks “under the hood,” as the rest of the economy struggles with weak demand.
Shares of Disney (DIS) dropped 8% after the company reported weaker-than-expected quarterly results, pressured by its streaming and theatrical segments. The entertainment giant joins several other consumer-focused companies that recently disappointed on earnings, including DoorDash (DASH), Dollar Tree (DLTR) and Starbucks (SBUX).
Investors now have reduced visibility into the economic outlook after the record 43-day government funding shutdown. While some analysts argue that the US Gross Domestic Product could take a 2% hit, others believe most of the negative effects will be reversed once federal spending returns. RBC analysts raised concerns about interpreting US job market data, “since furloughed and essential employees would be counted as unemployed.”
It may take time for investors to determine whether stock market valuations are stretched and to gauge the odds of the US government injecting liquidity through tax cuts or stimulus checks. Until then, Bitcoin (BTC) is likely to mirror broader economic uncertainty, amplified by the lack of consistent and reliable data.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
