The stock market started Thursday with rapid growth. By noon he was whimpering.
Breakthrough quarterly income statement from computer chip giant Nvidia, strong results Walmart and better than expected September job vacancy report Stocks initially rose as investors saw new signs that the U.S. economy may be resilient in the face of rising headwinds.
The early gains were brisk, with the S&P 500 index, a broad measure of equities, adding 1.5% in opening trading. The tech-heavy Nasdaq jumped 2% from the start. The Dow Jones Industrial Average rose 600 points.
However, by midday all three major indices were in the red. The retreat came as traders trimmed higher odds seen earlier in the day when the Federal Reserve announced interest rate cuts at its meeting next month following a strong September jobs report. Cryptocurrencies such as Bitcoin also sold off.
“Broad-based job gains suggest easing risks of higher unemployment,” Morgan Stanley analysts said in a note published shortly before noon. “We no longer expect the Fed to cut rates in December.”
Stocks have shown signs of weakness in recent weeks amid growing questions about how much room is left for an artificial intelligence boom after markets rose steadily for a year.
Nvidia was at the center of this boom. Wednesday's earnings report beat investor forecasts and showed there's still plenty of room for growth in artificial intelligence. However, Nvidia shares remained flat after reversing previous gains.
Walmart, the world's largest retailer and America's largest private employer, is widely seen as an indicator of U.S. retail and consumer sentiment. Therefore, when the company raised annual income And sales forecast Investors saw another good sign Thursday. Walmart shares rose more than 6%.
Long-awaited September vacancies reportwhich showed the US adding 119,000 jobs in September offered some glimmers of hope for the economy.
Although the unemployment rate rose to 4.4% from 4.3% in August, about 450,000 workers entered the labor force. Economists see this as evidence that job opportunities are still plentiful despite a wave of corporate layoffs.
Just before the release of the Bureau of Labor Statistics' employment report on Thursday, Verizon told employees it plans to lay off 13,000 employees, or about 13% of its workforce.
The company joins a number of other employers who say they plan to cut tens of thousands of jobs, including Amazon, General MotorsIBM, Microsoft, ParamountPurpose and UPS.
The jobs report, which reflects conditions before the government shutdown as well as more recent employment data, suggests a more mixed picture for the U.S. economy.
Manufacturing shed 6,000 jobs, continuing a trend in a sector that the Trump administration has touted as a key target of its economic policy. The transportation and warehousing industry also lost 25,300 jobs. Wage growth slowed and job totals for July and August were revised downward.
Employment growth in September was concentrated in the health care, hospitality and social assistance sectors.
Eyes now turn to the Federal Reserve, which will announce its next interest rate decision on December 10th.
After a mixed jobs report for September released on Thursday, chances of a rate cut in December have increased among traders. This will provide further stimulus to the economy, making it cheaper to borrow money, stimulating overall consumption and likely even greater growth in the stock market.
