Global markets stumbled on Tuesday, November 4, 2025, as risk aversion dominated investor sentiment amid concerns over slowing global growth and shifting expectations for U.S. monetary policy. The sell-off was led by U.S. technology and small-cap shares, while European and Asian indices also turned red. In Israel, Tel Aviv’s major indices ended mixed after volatile trade, with investors assessing both domestic earnings and global macro signals.

U.S. Markets Retreat as Tech and Small Caps Weigh on Sentiment

U.S. equities closed broadly lower on Tuesday, marking one of the sharpest single-day declines in recent weeks. The Nasdaq dropped 2.04% to 23,348.64, driven by weakness in high-growth technology names amid rising Treasury yields and a strengthening risk-off tone. The S&P 500 fell 1.17% to 6,771.55, while the Dow Jones Industrial Average slipped 0.53% to 47,085.24.

Small-cap stocks were hit even harder, with the Russell 2000 plunging 1.78% to 2,427.34, underscoring investor caution toward riskier equities. Meanwhile, the VIX volatility index surged 10.66% to 19.00, highlighting the heightened uncertainty surrounding the near-term outlook.

Currency markets offered mixed signals. The U.S. Dollar Index edged down 0.08% to 100.15, suggesting that safe-haven flows were tempered by expectations of policy continuity from the Federal Reserve. Market participants are now closely watching labor market and inflation data later this week for clues on the Fed’s next move.

European Markets Follow U.S. Weakness Amid Earnings Caution

European markets mirrored Wall Street’s negative tone, weighed down by disappointing corporate earnings and cautious investor sentiment. The DAX in Germany fell 0.76% to 23,949.11, while France’s CAC 40 lost 0.52% to 8,067.53. The pan-European STOXX 50 declined 0.34% to 5,660.20, and the MSCI Europe Index slipped 0.55%.

The British Pound Index weakened sharply by 0.89% to 130.23, reflecting currency market volatility following softer U.K. economic data. In contrast, London’s FTSE 100 managed a modest gain of 0.14%, supported by energy and mining stocks that benefited from defensive positioning.

Across the Eurozone, investors remain focused on upcoming inflation readings and policy commentary from the European Central Bank. The euro currency index dropped 0.35% to 114.82, underscoring continued weakness in regional sentiment as the bloc struggles to balance growth and fiscal constraints.

Asia Mixed with Japan Leading Declines; India and Sri Lanka Markets Closed

In Asia, trading sentiment was largely subdued as investors digested the overnight sell-off in the U.S. and awaited key central bank guidance. Japan’s Nikkei 225 suffered the steepest fall in the region, tumbling 2.94% to 49,984.01, while the KOSPI in South Korea dropped 2.47% to 4,020.05.

China’s SSE Composite Index slipped 0.41% to 3,960.19 amid persistent concerns over property market weakness and slowing industrial growth. Hong Kong’s Hang Seng Index eased 0.29% to 25,878.37. In Australia, the S&P/ASX 200 edged down 0.22% to 8,794.60, while the Australian Dollar Index fell 0.69% to 64.91, pressured by weaker commodity prices.

Trading was lighter across the region as India’s National Stock Exchange remained closed for Guru Nanak Jayanti and Sri Lanka’s Colombo Stock Exchange was shut for Ill Full Moon Poya Day.

Tel Aviv Market Ends Mixed as Domestic Stocks Diverge

In Israel, the Tel Aviv Stock Exchange saw mixed performance on Tuesday. The TA-35 index slipped 0.10% to 3,317.09, while the TA-90 dropped 0.63% to 3,602.04. Broader market sentiment was slightly negative, with 80 stocks declining and 43 gaining within the TA-125, which eased 0.20% to 3,382.22. Trading volume reached approximately NIS 3.81 billion in equities and NIS 5.44 billion in bonds.

The bond market was relatively stable, with the All-Bond Index down just 0.05%, while short-term bonds gained 0.02%. Despite global risk aversion, local investors maintained selective buying interest in defensive sectors, helping the TA-125 Value Index rise 0.28%.

Outlook for Wednesday, November 5, 2025

Looking ahead to Wednesday’s trade, global investors are expected to remain cautious as attention shifts to upcoming U.S. economic data, including employment and inflation figures. Market sentiment may hinge on signals from the Federal Reserve and European Central Bank regarding interest rate trajectories.

In Asia, trading activity should normalize as India and Sri Lanka resume operations, while in Tel Aviv, investors will monitor global risk trends and domestic corporate updates. With volatility rising and sentiment fragile, traders will likely favor defensive positioning heading into midweek sessions.