Valuation concerns and government shutdown fears cast a shadow over the market. After the worst week in months for US stocks, the market may see a calm week ahead.

After a trading week filled with news and financial reports, this week's schedule of financial reports and economic data shows that investors may face a relatively calm five days. Last week, US tech stocks experienced one of the worst periods of the year - the prices of Palantir (PLTR.US) and NVIDIA Corporation (NVDA.US) fell, leading the tech-heavy Nasdaq index to drop by 3%, marking its worst performance since early April, despite a slight rebound at the end of the week. The S&P 500 index fell by 1.7% last week, while the Dow Jones Industrial Average dropped by about 1.3%. The US government officially set a record for the longest government shutdown last week, expected to extend into its sixth week. While the government shutdown continues to affect the release of official economic data, private sector data has shown that the shutdown is hampering economic prospects. Consumer confidence in the US plummeted in November, hitting a three-year low, with concerns from the public about the impact of the shutdown on the economy and personal finances. Additionally, data shows that job cuts in US businesses in October reached the highest level for the same month since 2003. This week, investors will face the last wave of important third-quarter earnings reports, including companies in the tech sector such as CoreWeave (CRWV.US), Oklo (OKLO.US), and Rocket Lab (RKLB.US). Additionally, companies like Walt Disney Company (DIS.US), Paramount Skydance (PSKY.US), and Bruker Corporation (BN.US) will also announce their performance. In terms of economic data, the ongoing government shutdown is expected to delay the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) reports, as well as retail prices and initial jobless claims data - which were supposed to be the focus of this week. Therefore, this week will be relatively quiet for investors in terms of data. The National Federation of Independent Business' small business confidence index and the Mortgage Bankers Association's mortgage application data will be the main focus. "This requires sustained income growth." Major global tech giants are heavily betting on artificial intelligence (AI), and investors are buying their stocks in large quantities, pushing their valuations to new highs. However, questions are growing about whether the growth needed to support these high valuations is sustainable. Thomas Shipp, director of stock research at LPL Financial, said, "This is the dilemma facing the market. On one hand, there is excitement about the potential impact and profitability of AI in the future, but on the other hand, there are concerns that the growth expectations implied by current valuations are too high." Last week's sell-off reflected an increase in investor anxiety. NVIDIA Corporation fell by over 7% last week, marking its worst weekly performance in over a year. Meta and Microsoft Corporation, part of the "Magnificent Seven" of US stocks, also saw drops of over 4%. Recently, analysts and investors have been focusing on the phenomenon of "circular investment" among the leading AI companies globally. NVIDIA Corporation signed a $6.3 billion deal with AI data center company CoreWeave, wherein the latter is both a customer of NVIDIA Corporation and holds a 7% stake in NVIDIA Corporation. There are also reports that NVIDIA Corporation has invested $2 billion in its customer xAI. OpenAI has signed collaboration agreements with Oracle Corporation, CoreWeave, and chipmaker AMD, among others. Last month, OpenAI also invited Broadcom Inc. to build its first self-developed AI chip. Thomas Shipp said, "These investments can be seen as votes of confidence in the profit potential of downstream users and reflect the intention to share the fruits of future growth." "The more pessimistic view is that this type of circular financing is actually supporting unprofitable business lines to maintain demand for chips." Investors are also concerned about the amount of funding these companies need to achieve their ambitious goals. For example, after Chipotle lowered its sales expectations for the year in its third-quarter earnings report at the end of October, citing widespread economic headwinds consumers are facing. Chipotle's CEO Scott Boatwright said on the earnings call that Chipotle has seen "overall declines in consumer frequency across all income groups." Particularly affected are households with annual incomes of less than $100,000 and the "25 to 35 age group - a group facing multiple challenges such as rising unemployment rates, increasing student loan repayments, and slowing actual wage growth." Companies like Cava and Sweetgreen that recently reported their performance also reflect similar trends. "Young people can't afford salad bowls" is gradually becoming a popular metaphor for the economy of 2025. However, not all chain restaurants are struggling. McDonald's Corporation announced last week that its US same-store sales exceeded expectations for the second consecutive quarter, emphasizing that its "value for money" promotion strategy has been effective in a "challenging environment." During the investor call, McDonald's Corporation said that growth particularly strong among high-income consumers. This is good news for a company selling $8 meals but may be a more difficult story for a company selling $16 salads.