S&P 500 Posts Largest One-Day Drop Since April 2025 as Nasdaq Enters Correction

Key Takeaways

1. The S&P 500 fell 4.4% in a single session, its biggest one-day decline since April 4, 2025, and the VIX jumped 70%, the third-largest daily percentage gain since 1990.
2. The S&P 500 is now 6% below its October 6 high, marking its third pullback of the year and the 34th decline of more than 5% since the March 2009 low.
3. The Nasdaq has entered correction territory, down more than 11% from its high a month ago, while the S&P 500 forward P/E has fallen to 17.8 from a January 12 peak of 22.4.
4. AAII bearish sentiment rose to 48.4%, a seven-week high, and retail investors sold $379 million in individual stocks by 2 p.m. ET, the worst morning since March 2020.
5. October nonfarm payrolls rose 165,000, far above the 70,000 estimate, with the unemployment rate at 4.1% and average hourly earnings up 0.4% month-over-month.
6. Value stocks are up 24% in 2026 while growth stocks are down 6%, a more than 30-percentage-point gap that would be a record if sustained, exceeding the dot-com bust era.
7. Jason Spinell joined Collaborative Fund as a partner after leading the Slack Fund, where he invested in nearly 100 early-stage companies.

1. Market Selloff and Volatility

1. The S&P 500 dropped 4.4% in one day, the largest single-day decline since April 4, 2025, during the tariff-driven bear market, and the 37th largest one-day drop since 1989. Charlie Bilello described volatility as bidirectional and nonlinear, with large declines and rallies often adjacent, calling it the "entry fee" for long-term stock returns exceeding bonds and cash. 1 2 3 4
2. The S&P 500 is 6% below its October 6 high, its third pullback of the year and the 34th decline of more than 5% since the March 2009 low, each of which Bilello said felt like the end of the world at the time. The VIX surged 70% in a single day, the third-largest daily percentage gain since data began in 1990. 1 2 3 4
3. The Nasdaq has fallen into correction territory, down more than 11% from its high a month ago, and the S&P 500 forward P/E has dropped to 17.8, 1.4 points below its 10-year average and well below the January 12 peak of 22.4. AAII sentiment for the week ending November 4 showed bulls at 34.1%, down from 37.8%, and bears at 48.4%, up 7 percentage points from 41.4%, a seven-week high in pessimism. VandaTrack data showed retail investors net sold $379 million in individual stocks from the open to 2 p.m. ET, twice the worst morning in March 2020. 1 2 3 4 5
4. Meb Faber cited data showing single-day stock market declines of 4.5% occur on about 1% of trading days, roughly twice a year, while 9% declines occur about 0.1% of the time, roughly twice a decade, mostly within established downtrends, and said "we are not currently in that trend." He also expressed surprise at a $30 billion fund or pod blowing up, saying he had never heard of the institution, and argued diversification tools are always too plentiful in rallies and insufficient in selloffs, emphasizing tail risk. 1 2 3

2. Economic Data and Consumer Signals

1. October nonfarm payrolls added 165,000, far exceeding the 70,000 estimate, with the prior month revised up to 60,000 and two-month net revisions adding 84,000 jobs. The unemployment rate was 4.1%, below the expected and prior 4.2%, while average hourly earnings rose 0.4% month-over-month versus 0.3% expected and 3.1% year-over-year versus 2.9% expected, with weekly hours unchanged at 34.4. 1 2 3 4 5 6
2. The labor force participation rate rose to 61.9% in October, with men at 67.3% and women at 56.9%, while prime-age participation held at 83.7%. Temporary layoffs fell to 766,000 and permanent job losers fell to 1.733 million, but the share of unemployed for more than 27 weeks rose to 27.6% from 27.1%, and manufacturing employment added 19,000 versus 7,000 expected. 1 2 3 4 5
3. The November University of Michigan consumer sentiment index rose to 51.0 versus 48.0 expected, with both current conditions and expectations beating forecasts, while one-year inflation expectations fell to 4.3% from 4.7% and 5-10 year expectations fell to 3.4%. Challenger Gray data showed employers announced nearly 445,000 hiring plans in October, up 57% year-over-year, mainly due to seasonal hiring pulled forward into October, and the New York Fed global supply chain pressure index fell to 1.26 in October from 1.36. 1 2 3 4
4. A Visa survey showed consumers plan to spend an average of $777 on holiday gifts this year, up nearly 6% year-over-year, with more than half of respondents listing travel and live events as their top choice. Liz Ann Sonders noted the latest MarketSnapshot video was recorded the previous day and did not cover the day's plunge. 1 2

3. Market Leadership and Asset Performance

1. Value stocks are up 24% in 2026 while growth stocks are down 6%, a more than 30-percentage-point lead that Bilello said would be a record gap if sustained, exceeding the gap during the dot-com bust, and he asked whether this is the start of a major shift in market leadership. Meb Faber cited the same data and asked whether it signals a major shift. 1 2 3
2. Bilello listed asset declines from all-time highs: Apple -3%, Microsoft -4%, S&P 500 -6%, Amazon -9%, Meta -24%, Nvidia -26%, Palantir -27%, gold -27%, Google -31%, Tesla -31%, AMD -39%, bitcoin -40%, SpaceX -45%, Netflix -51%, ether -55%, dogecoin -90%, Fartcoin -96%, TrumpCoin -98%, and MelaniaCoin -99%. He referenced a January 19, 2025 post promoting the Melania meme coin the day before the inauguration, noting the coin has fallen 99.6% since. 1 2 3 4
3. Lyn Alden argued that in an era of increasing cyberattacks, using never-updated offline floppy disks for nuclear codes, air traffic control, and core banking systems is not the worst choice, as such ultra-secure, slow-updating technology minimizes contact with the outside world. She noted nuclear systems still used such technology until about 2019 and that the FAA is phasing it out, and joked that sometimes the Nasdaq needs to fall 6% for diversified value investors to feel good about falling slightly less. 1 2 3

4. Personnel and Industry Moves

1. Jason Spinell joined Collaborative Fund as a partner; he previously led the Slack Fund, helped found it in San Francisco in 2016, and invested in nearly 100 early-stage companies in North America and Europe including Lattice, Loom, Glean, Hightouch, 1Password, and Fundamental. After Salesforce acquired Slack for $27.7 billion, his investment mandate expanded to cover the entire AI technology stack from infrastructure to frontier technology to end applications. 1
2. Spruce Point Capital said IRTC's earnings call was particularly poor and questioned why it trades at a premium multiple to medical device peers, reinforcing its view that IRTC's recent acquisitions are entirely defensive and costly, a stopgap masking damaged growth. 1
3. Marc Andreessen shared that Scott Kupor, a16z's first employee who worked there for 16 years and grew it from 3 to about 700 people, now heads the U.S. Office of Personnel Management overseeing 2 million federal employees. The shared content said a16z borrowed from Michael Ovitz's CAA model, that Kupor believes the federal government fears risk, that 99.7% of federal employees pass performance reviews, only 7% are under 30, and 400 million pages of retirement records are stored in an underground limestone mine in Pennsylvania. 1