Volatility After Jobs and Nvidia
Thursday produced a wild session as a long-delayed labor report and a blockbuster tech print collided, sending risk assets through a sharp intraday swing. Nvidia's earnings beat expectations, but the market still sold off after the Bureau of Labor Statistics released the September employment snapshot.
Traders also recalibrated Fed odds after comments from New York Fed President John Williams, which pushed futures toward a higher probability of easing. Following Williams' remarks, markets priced in about a 64% chance of a December cut, helping equities bounce in early trading while Treasury yields fell.
The immediate impact was broad. Tech names led the declines during the washout, bitcoin plunged into the mid-five figures and US futures swung between gains and losses as investors retraced rapid moves. That volatility suggests dip-buyers may need more clarity on inflation and hiring before re-entering aggressively.
Next steps. Expect choppy sessions into the Fed meeting and for investors to treat corporate guidance, especially in AI and data-center spending, as the key determinant of whether the recent correction deepens or stabilizes.
September Jobs Show Mixed Signals
Thursday's long-delayed report from the Bureau of Labor Statistics showed nonfarm payrolls rose by 119,000 in September, a surprise to the upside that ended a weeks-long data blackout. The BLS release of Nonfarm payrolls also included downward revisions to July and August and an unemployment rate that ticked up to 4.4%.
Who moved and why. Employers added jobs concentrated in health care, leisure and hospitality, and social assistance while transportation, federal government and professional services recorded losses, according to the household and establishment surveys. The report matters because it fills a hole left by the record government shutdown, but economists warned the snapshot is backward-looking and the revisions complicate interpretation.
Policy and politics. The mixed hiring picture leaves the Federal Reserve with ambiguous signals ahead of its December meeting, and it gives policymakers room to debate whether the labor market has softened enough to justify another cut. At the same time, affordability concerns and public frustration over prices are forcing the administration to float near-term relief measures, while abroad, Japan approved a 21.3 trillion yen stimulus package to prop up households and growth, pressuring the yen and global yields in Tokyo.
What to watch. Markets will parse upcoming inflation prints, the Fed's December deliberations and fresh employment releases for October and November, which the BLS plans to publish together next month. The combination of data noise from the shutdown and big fiscal moves abroad creates a higher-than-normal chance of market whipsawing in the weeks ahead.
AI Wins, But Skepticism Remains
Wednesday night’s results and the next-day market swings showed the split between underlying demand for AI hardware and investor caution about the sector's financing. Nvidia reported another beat and bullish commentary, yet investors still trimmed positions amid concerns around valuation and the scale of customer capex commitments in its guidance.
Why it matters. Analysts and market strategists are flagging a structural shift: hyperscalers and AI players are channeling enormous spending into chips, data centers and training, which increases leverage risk across both public and private markets. One commentator put the expected AI infrastructure spend at roughly $375 billion this year and rising further next year, underscoring the scale of investment and the attendant financing risk in recent analysis.
Crypto reacted like a risk proxy. Bitcoin plunged alongside equities, reinforcing that digital assets remain highly sensitive to shifts in liquidity and sentiment. The knock-on effect is tighter funding conditions for levered strategies and an elevated probability of margin-driven selling if prices keep falling.
Next steps. Watch corporate commentary on capex and balance-sheet strategies during upcoming earnings and regulators' posture on AI financing and state-level AI rules. If spending continues to be funded with incremental debt, volatility in both tech equities and credit markets could persist.
Market Signals to Track
- Federal Reserve meeting on Dec. 9-10 and any shifts in rate guidance, especially after remarks by John Williams.
- December 16 release when the BLS will publish October and November jobs data together; that print should clarify the recent labor noise from the delayed report.
- Corporate guidance from AI infrastructure suppliers and hyperscalers, which will reveal whether capex pipelines are being financed conservatively or with leverage (Nvidia preview).
- Japan's fiscal rollout and currency moves as the 21.3 trillion yen package progresses through parliament, a key driver for EM flows and global yields (Tokyo).
- Bitcoin and crypto ETF flows as a read on risk appetite and potential forced selling in leveraged pockets of the market (crypto sensitivity).
