US stock markets experienced a climb on Thursday, led by a surge in technology shares following impressive earnings from Nvidia, which revitalized investor confidence in artificial intelligence (AI) sectors. While the major indices saw substantial early gains, they ultimately settled lower than their peak levels during the day.
The tech-heavy Nasdaq Composite rose approximately 0.5%, after an earlier ascent of about 2.5%. The S&P 500 followed suit with an increase of nearly 0.4%, previously experiencing a jump of 1.8%. The Dow Jones Industrial Average, which comprises fewer technology stocks, edged up by around 0.3%.
Nvidia’s stock witnessed a notable rise of nearly 5% in initial trading but later tempered those gains. The chipmaker reported earnings that surpassed expectations and provided a robust revenue outlook for the fourth quarter. CEO Jensen Huang emphasized that demand for its Blackwell processors is “off the charts,” alleviating concerns about a potentially prolonged downturn in AI-related stocks.
The release of the eagerly awaited September nonfarm payrolls report prompted a fresh analysis of interest rate cut expectations. The US economy added 119,000 jobs in September, significantly higher than the anticipated gain of 51,000. However, the unemployment rate increased to 4.4%, up from 4.3% in August, contrary to expectations that it would hold steady.
Following the jobs report, options traders adjusted their projections, estimating a 42% chance of a rate cut at the Federal Reserve’s December meeting, compared to just 28% earlier in the day. This report was particularly significant as it was the first major economic insight since the record-long government shutdown, which had obscured Wall Street’s ability to assess the economic landscape.
Minutes from the Federal Reserve’s October meeting revealed a divide among policymakers regarding the risks posed by either a cooling labor market or persistent inflation, which contributed to uncertainty surrounding the upcoming December decision.
In additional earnings news, Walmart raised its full-year forecasts after surpassing profit and sales expectations for the third quarter. The company’s results were seen as a barometer for consumer strength heading into the holiday season, prompting a significant uptick in its stock price.
Despite the initial enthusiasm in the markets, the major indices cooled off later in the trading session. The Nasdaq Composite and S&P 500, which had earlier celebrated considerable increases, both settled at gains of around 0.6%. Nvidia, after peaking, stabilized with only marginal gains, while the Dow Jones maintained its upward trajectory.
In the cryptocurrency market, Bitcoin regained stability near $90,500 per token after having dipped below the $90,000 mark during previous trading sessions. This stabilization followed heightened speculation regarding potential Federal Reserve interest rate cuts in December, as indicated by the jobs report.
Chipmakers and prominent tech companies also saw a positive reaction due to Nvidia’s impressive performance. Stocks for Broadcom and AMD both rose around 4%, while major tech firms like Google and Meta advanced by approximately 3% and 2%, respectively. Tesla, which has aspirations in AI technology for robotics and autonomous vehicles, experienced a significant gain of nearly 6%.
Nvidia’s performance not only reassured investors about AI market prospects but also spurred activity among its partners, with companies such as Taiwan’s TSMC and CoreWeave benefiting from the heightened optimism surrounding AI demand.
As the market digests the latest economic statistics alongside corporate earnings, investors remain attentive to upcoming Federal Reserve policies and job market trends, which will significantly influence the direction of the stock market in the coming weeks.
