Stocks shot higher out of the gate Thursday with bulls encouraged by Nvidia's (NVDA) earnings report and stronger-than-expected September jobs data. However, the tide quickly turned and all three main indexes were staring at stiff losses by lunchtime as the AI bellwether turned lower and odds for a December rate cut dwindled.
At Thursday's open, stock market gains ranged between 1.3% and 2.1%. But at the close, the blue-chip Dow Jones Industrial Average was down 0.8% at 45,752, the broader S&P 500 was off 1.6% at 6,538, and the tech-heavy Nasdaq Composite had slumped 2.2% to 22,078.
Nvidia's Q3 earnings report hit all the high notes – top- and bottom-line beats, upbeat guidance and confirmation of $500 billion in forward orders for the company's Blackwell and Rubin chips.
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Shares rose roughly 6% in Wednesday's after-hours session and opened Thursday more than 4% higher. But NVDA was down 3.2% at the close – making it one of the worst-performing Dow Jones stocks of the day – as AI bubble worries resurfaced.
"The staggering amounts of capital that the hyperscalers are investing in AI infrastructure has made investors wonder if there will ever be a pay-off big enough to justify the outlays," says Jim Kelleher, director of research at Argus.
While Kelleher believes AI has "many more chapters to be written as possibly the most transformative technology since the internet," it's less clear "how it will perform as an investment vehicle in the intermediate term."
September jobs report keeps the odds of a December rate cut low
Weighing on sentiment was the shutdown-delayed release of the September jobs report, which showed a strong headline beat – 119,000 jobs added vs 50,000 expected – but an increase in the unemployment rate to 4.4%.
The report also showed downwardly revised figures for July and August, resulting in 33,000 fewer jobs combined in those two months than previously reported.
The September jobs report "added fresh uncertainty to the Federal Reserve's December 10 policy decision," says Richard Potts, economist at Bondford. "Ultimately, this was a jobs report with something for everyone. The headline strength argues against an immediate rate cut, but the underlying softness gives policymakers room to move if they choose."
The data leave a divided Fed with a tough call in December. According to CME Group FedWatch, futures traders are currently pricing in a 60% chance the central bank will keep the federal funds rate unchanged when it meets next month – down from 70% one day ago but up from 1% one month ago.
Walmart shines after earnings
Not all of the day's news was doom and gloom. Walmart (WMT) shot up 6.5% after the world's largest retailer reported higher-than-expected fiscal 2026 third-quarter earnings and revenue. It also raised its full-year forecast.
"WMT continues to block and tackle, which is exactly what investors would like to see after the CEO change from Doug McMillon to John Furner," says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors. "It shouldn't be a surprise that this transition coincided with a very WMT-esq report via a beat and raise and strong commentary around positioning."
Wagner adds that long term, he'd be a buyer of the Dow stock on any omnichannel weakness "as margin expansion continues to outperform peers."
In a separate announcement, Walmart said it will move its common stock listing to the Nasdaq from the New York Stock Exchange (NYSE), effective December 9. Its ticker symbol will not change.
"Moving to Nasdaq aligns with the people-led, tech-powered approach to our long-term strategy," said Walmart Chief Financial Officer John David Rainey. "Walmart is setting a new standard for omnichannel retail by integrating automation and AI to build smarter, faster and more connected experiences for customers, while enabling our associates to deliver even greater value at scale."
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