Things were going well before Halloween, with stocks up 17% for the year. Then Meta raised its capital spending forecast, and investors took fright.

Why it matters: The resulting selloff suggests investors who had previously shrugged off worries about an AI bubble are now turning more skeptical.

What they're saying: Meta's earnings report "had some scratching their head, thinking is all this spend justified and where is the ROI (return on investment) on this going to be?" Ken Mahoney, CEO at Mahoney Asset Management, told Axios via email.

• It was not only about the earnings reaction, but what came before, which was an "unhealthy rally," Mahoney adds.

Zoom out: Meta is not an outlier. There is a broader question of whether the companies driving the market can afford all the AI infrastructure they plan to invest in.

• OpenAI CFO Sarah Friar suggested the U.S. government could provide assistance for AI investments, fueling concerns that the firm, well, needs assistance. (The company later said it does not want federal guarantees.)
• The Big Tech firms are issuing more debt to fund their buildouts, totaling about $200 billion of investment-grade issuance so far this year. Famed Big Short investor Michael Burry has essentially bet against the AI narrative.

The big picture: The broader economic outlook is also not encouraging for investors as they try to navigate without government data.

• Private labor market data revealeded the worst October for layoffs in two decades. The University of Michigan consumer sentiment index in early November neared its worst level ever.
• While economic weakness could prompt additional interest rate cuts, that was not enough to encourage buyers on Friday, and stocks fell again.

Reality check: Stocks erased just two weeks of gains, and investors are jittery. Many participants in this bull market are not used to down days, but pullbacks are normal.

• That is exactly the point big bank CEOs made last week, though the mere mention of a pullback may have inadvertently fueled part of the selloff.

What to watch: The timeline for a potential rebound.

Gen Z is not buying the dip, while boomers are, per the latest Charles Schwab STAX index, which analyzes the trading activity of millions of customers.

Why it matters: There is a generational divide in dip buying, as younger investors appear to be skittish as their riskier investments start to fade.

What they're saying: There is "less stepping back into the market from Gen Z" than Gen X because of the volatility in riskier assets, Joe Mazzola, the head of trading and derivatives strategist at Charles Schwab, tells Axos.

• Gen X investors were "more aggressively positioned toward some of the Mag 7" while Gen Z leaned into bitcoin products now down for the year, potentially pushing Gen Z to take less risk in the market.

Between the lines: The STAX report, which covers client activity through October, indicated "tremendous buying" within AI and megacap names.

• Still, while the risky corners of the market started to underperform, younger retail clients may have taken a step back from dip buying.

Zoom in: Net selling was highest in tech, with Apple, Tesla and Intel among them. Popular buys included Meta, Nvidia, Microsoft, Amazon and Palantir.

• The popular names are companies with "solid balance sheets," Mazzola says, which indicates that investors were looking for "stronger earnings" for now versus the potential down the road.

Threat level: The dominance of retail in the market "makes the inevitable break sharper," Paul Kredosky, a venture capitalist and MIT research fellow, tells Axios.

• "It puts a floor for now," he said, because dip buying prevents what could turn into larger selloffs, but when that pattern breaks, drawdowns could worsen if retail investors become skittish.
• Yet option activity among retail suggests bullishness, Mazzola says, while Wall Street buys of puts for downside protection last week indicates jitters.

The bottom line: For now, the "dip buying continues" for retail, he says. The question is whether it will be enough to force major Wall Street investors to stay in the market.

The price of bitcoin fell below the psychologically important $100,000 level for the first time since June, but the larger story is that the cryptocurrency has given back nearly all its 2025 gains.

Why it matters: This is decision time for bitcoin investors. Do they stay in and ride the volatility? Or do they get out if they think the October record high was the market top?

The big picture: $1,000 invested in bitcoin on Jan 1. is worth $1,072 now.

• That is better than if you had simply tucked it into Treasury securities this year, but still not the kind of eye-popping return that people talk about in cryptocurrency circles.

What they're saying: "The days of 1,000 times, 100 times, or even possibly 10 times gains in BTC are probably over," says Alex Thorn, director of research at Galaxy, the publicly traded crypto shop, in his most recent research alert.

• He lowered his forecast for the end of year to $120,000 from $185,000.

Reality check: Very nearly all the bitcoin held on-chain is in profit anyway.

• That does not mean no one has lost money or closed out with disappointing gains, but those are the short-term investors who hold bitcoin through third-parties, such as exchanges like Coinbase or ETFs from BlackRock.
• Only 11% of bitcoin is held by exchanges and about 8% is held by ETFs.

The bottom line: The median bitcoin holder sits on their assets for 2.5 years.

• True believers hold on. They have seen this before.