Investors Seek Safety In Defensive Stocks as Circular AI Trade Loses Luster

Barry Adams
12 Nov, 2025
New York City

Stocks on Wall Street attempted to rebound on Wednesday amid sector rotation away from high-flying tech stocks. 

The S&P 500 index increased 0.3%, and the tech-heavy Nasdaq Composite advanced 0.6% as investors awaited the resumption of the release of macroeconomic data.

The U.S. federal government is likely to reopen as early as this week after the Senate passed a spending resolution on late Monday, and the bill is likely to win an approval on Wednesday.

The latest labor market report highlighted ongoing weakening conditions as private businesses trimmed payrolls. 

For the four weeks ending Oct. 25, private employers trimmed an average of 11,250 jobs a week, indicating that the labor market struggled to produce jobs consistently during the second half of the month. 

These numbers are preliminary and could change as new data is added, according to an update released by ADP on Tuesday. 

 

U.S. Stock Movers 

AI-related stocks lacked direction as investors worried about stretched valuations and moved into defensive sectors.

Nvidia edged up 0.6% to $194.87, Alphabet Inc. jumped 0.4% to $293.50, Meta Platforms inched higher 0.3% to $629.30, and Apple Inc. inched higher 0.2% to $275.60. 

Healthcare and general retailers extended this week's gains as investors sought safety in defensive stocks. 

Walmart edged up 0.01% to $103.37, Home Depot decreased 0.1% to $372.21, and McDonald's dropped 0.2% to $306.30. 

Hon Hai Precision Industry, or Foxconn, increased 1.8% to NT $251.0 in Taipei trading after the company reported a surge in revenue and earnings. 

The supplier to Nvidia said demand for its AI server supported growth in revenue and earnings in the September quarter. 

Revenue increased 11% to NT 2.06 trillion, net profit advanced 17% to NT $57.7 trillion, and diluted earnings per share rose to NT $4.15 from NT $3.55 a year ago.