On Friday, U.S. stocks snapped back from a brutal two-day slide after New York Fed President John Williams said there is room for a rate cut “in the near term.” His comments, delivered in a speech in Santiago, Chile, pushed market-implied odds of a December cut to about 70%–75%, up from roughly 40% a day earlier, according to the CME FedWatch tool as cited by Yahoo Finance and Barron’s.
The comments arrived after a wild Thursday session in which markets initially soared on blowout Nvidia earnings and a confusing September jobs report, then reversed to deep losses as investors questioned whether the data really guaranteed near-term easing. By Friday’s close, the Dow gained roughly 500 points, while the S&P 500 and Nasdaq rose around 1%. The rebound did not erase the week’s damage: the S&P 500 finished down nearly 2% and the Nasdaq about 3%, with CNN’s Fear & Greed Index back in “extreme fear.”
Under the surface, traders continue to debate whether AI-linked tech stocks are in a bubble. Nvidia rallied intraday Friday on a Reuters report that the Trump administration may allow sales of its H200 chips to China, but the stock still closed lower on the week, and chip peers from Taiwan Semiconductor to Samsung and SK Hynix have been under pressure. Bitcoin mirrored the risk-off mood, sliding toward $80,000 in what could be its worst month since 2022, even as equities bounced on Friday.
Analysts warn that until investors get clearer signals on Fed policy and the durability of AI earnings, intraday swings like Thursday’s 3.5% peak‑to‑trough S&P reversal will remain common. Williams’ dovish tilt gave equities breathing room and helped pull bond yields lower, but other Fed officials, including Boston Fed President Susan Collins and Dallas Fed President Lorie Logan, have stressed inflation risks and questioned the need for more cuts. That internal split keeps December’s decision a live event and suggests volatility may stay elevated into year-end.
