Market Rollercoaster: Nvidia’s Earnings Spark Rally — Then a Sharp Reversal
Article
On Thursday, U.S. stock markets rode a wild wave of optimism before tumbling by the close — a dramatic reversal fueled by surging then fading enthusiasm around Nvidia and mixed signals from the labor market.
Morning Rally Fueled by Nvidia & Jobs Surprise
Markets started the day strong. Nvidia’s third-quarter earnings beat expectations, driving its stock more than 5% higher in pre-market trading. The company posted $57 billion in revenue — well ahead of forecasts — and guided to roughly $65 billion for the next quarter.
At the same time, a delayed U.S. jobs report revealed 119,000 new jobs added in September, more than double the consensus estimate. But the unemployment rate ticked up to 4.4%, a slightly weaker-than-hoped signal that left investors unsure.
This buoyed early gains. Investors saw the data and Nvidia’s strength as signs of a resilient economy, potentially paving the way for a more favorable interest-rate environment.
Afternoon Sell-Off: Valuation Fears Return
However, the optimism didn’t hold. By afternoon, markets were bleeding red:
- The Nasdaq Composite dropped 2.2%.
- The S&P 500 gave back 1.6% of its gains.
- The Dow Jones slipped about 0.8%, losing nearly 400 points.
Nvidia, despite its strong report, reversed course — ending the day down significantly. The reversal reflected lingering investor anxiety over lofty valuations, particularly in AI-related stocks, reigniting talk of a potential tech bubble.
Key Themes Driving the Market Mood
- AI Valuation Risk
Nvidia’s rally and strong outlook provided a short-lived reprieve, but some investors remain deeply uneasy about how much value is baked into AI-growth stocks. - Unclear Fed Signaling
The jobs data is the last major labor report before the Fed’s December meeting, and with mixed signals, the path to a rate cut is notably uncertain. - Volatility Comes Back
The stock swings underscored how quickly sentiment can shift. After the early rally, risk-off behavior returned, especially in tech-heavy sectors.
Notable Movers Beyond Nvidia
- Micron and SanDisk: These data-storage names tumbled sharply, with Micron down nearly 7%, as profit-taking intensified.
- Walmart: One of the few bright spots — Walmart surged on a strong earnings outlook.
Outlook: Where the Market Might Go Next
Given the tug-of-war between strong corporate earnings and valuation skepticism, traders will likely focus on:
- How seriously investors take Nvidia’s guidance
- Upcoming Fed communications and rate-cut odds
- Any fresh macro data that could clarify the economic backdrop
If the market leans into risk again, tech could bounce — but any cracks in growth or policy clarity may relay more turbulence.
