The Nasdaq 100 experienced a significant decline, dropping 2.2% on Thursday, marking its worst performance in over a month as investors turned away from technology stocks. Despite Nvidia reporting strong earnings that exceeded expectations and offering positive guidance, the broader market was unable to recover from its downturn.
This week has been particularly tumultuous for Wall Street, with concerns about inflated valuations resurging alongside uncertainties regarding the future direction of the Federal Reserve. Nvidia’s impressive results, typically a catalyst for market gains, failed to reverse the downward trend, illustrating the precarious sentiment surrounding tech investments.
In the cryptocurrency market, Bitcoin faced a dramatic slide, plummeting to nearly $80,000—a drop of more than 35% from its record highs last month. Over the past week alone, Bitcoin fell over 10% as outflows from exchange-traded funds persisted, marking a stark contrast to the recent wave of institutional enthusiasm it had enjoyed.
Adding to market volatility, the delayed September jobs report, released six weeks later than scheduled due to the federal government shutdown, offered mixed signals. While employers added 119,000 jobs—outpacing economists’ forecasts—the unemployment rate ticked up to 4.4%, the highest since late 2021. This combination of steady job growth alongside rising unemployment has left markets uncertain about future economic conditions.
The week saw dramatic swings in the odds for potential rate cuts, which fluctuated from just 25% on November 20 to over 70% the following day, driven by dovish commentary from Federal Reserve officials. This volatility highlights the market’s sensitivity to hints from the Fed about its monetary policy.
On Main Street, the economic strain is palpable. The University of Michigan’s Consumer Sentiment Index recorded a dismal 51 for November, representing its second-lowest reading in over 70 years. Joanne Hsu, the survey’s director, indicated that households are feeling discouraged due to high prices and diminishing incomes. Notably, confidence among wealthier households—typically more connected to the stock market—also took a hit as sentiments worsened.
Despite these broader challenges, not all sectors were negatively impacted. The healthcare sector showed resilience, with Eli Lilly becoming the first pharmaceutical company to surpass a $1 trillion valuation, reflecting strength amidst the market turmoil.
