Investors faced a tumultuous trading day, with hopes for a positive boost following Nvidia’s earnings quickly dashed. Initially, stocks opened higher, but a notable midday drop raised concerns about the sustainability of the artificial intelligence sector’s gains. Despite Nvidia reporting impressive quarterly results and guidance, its stock fell more than 3%, erasing a 5% uptick from earlier in the day, setting it on track to finish the week down 5%. The Dow Jones Industrial Average experienced significant volatility, swinging more than 1,100 points between session highs and lows, ultimately closing in the red. The Nasdaq Composite, heavily influenced by tech stocks, closed down 2.15%. Furthermore, the CBOE Volatility Index, often referred to as Wall Street’s fear gauge, reached levels not seen since April, while Bitcoin’s value dipped to levels reminiscent of that same month, underscoring a broader retreat from riskier assets.
In labor market news, the delayed September jobs report was released, revealing an increase of 119,000 jobs—significantly exceeding economists’ expectations. However, the unemployment rate rose to 4.4%, marking its highest point since 2021. The likelihood of an interest rate cut at the Federal Reserve’s upcoming meeting remained low following the report. There was a shift in sentiment earlier this morning after comments from New York Fed President John Williams, who indicated “room for a further adjustment” in interest rates, sparking renewed speculation of a potential rate cut in December.
In retail, Gap Inc. reported a strong third quarter, driven by its viral “Better in Denim” campaign, which helped increase comparable sales by 5%, surpassing analyst expectations. The results also showed positive outcomes for Old Navy and Banana Republic, with shares rising 4.5% in after-hours trading. However, its athleisure brand, Athleta, reported an 11% decline in sales. This week has been busy for retail earnings, highlighting that value-oriented retailers are gaining ground with shoppers across various income brackets.
On the regulatory front, the White House is reportedly drafting an executive order to challenge individual state laws concerning artificial intelligence. This initiative would likely aim to limit legal challenges and prevent federal funding to states that enact such regulations, a move that many AI industry leaders have advocated for as they oppose a fragmented regulatory approach across states.
Lastly, in the competitive air taxi market, Joby Aviation has filed a lawsuit against Archer Aviation, accusing it of employing stolen information from a former employee to gain an advantage in its deals. Joby claims that the ex-employee, George Kivork, took proprietary files before joining Archer, a claim Archer has dismissed as “baseless litigation.”
This week’s market activity is underscoring existing volatility amid economic indicators and corporate earnings, setting the stage for further uncertainty as investors navigate contrasting signals.
