Stock market fizzles despite Nvidia, Walmart strength
A stellar quarterly report from computer chip giant Nvidia, a strong performance from Walmart and a better-than-expected September jobs report sent stocks higher Thursday, as investors saw new signs that the U.S. economy may show resilience in the face of deepening headwinds.
The recovery was rapid at first, with the S&P 500, a broad measure of stocks, gaining 1.5% in open trading. The tech-heavy Nasdaq jumped 2% early on. The Dow Jones Industrial Average gained 600 points.
Buying eased around midday, however, with much more moderate gains on all three major indexes. The Nasdaq was up just 0.26% as of 11:53 a.m. ET.
Stocks have shown signs of slowing in recent weeks, amid growing questions about how much room the artificial intelligence boom has left after propelling markets through a year of steady gains.
Nvidia has been at the heart of this boom. Its earnings report on Wednesday beat investor forecasts and suggested there was still plenty of room for growth in AI. However, Nvidia’s stock was almost stable before noon, after giving up an earlier rise.
Walmart, the world’s largest retailer and America’s largest private employer, is widely seen as a bellwether for retailer and consumer confidence in the United States. So when the company raised its full-year earnings and sales outlook on Thursday, investors saw another good sign. Walmart’s stock was more than 6% higher.
A third factor that sent stocks higher was data from the long-delayed September jobs report, which showed the U.S. added 119,000 jobs in September, a much higher figure than expected.
Although the unemployment rate fell to 4.4% from 4.3% in August, about 450,000 workers entered the job market. Economists see this as proof that job opportunities are still numerous, despite a wave of layoffs in companies.
Just before Thursday’s jobs report was released by the Bureau of Labor Statistics, Verizon announced to employees that it planned to lay off 13,000 employees, or about 13% of its entire workforce.
The company joined a string of other blue-chip employers that say they want to cut tens of thousands of jobs, including Amazon, General Motors, IBM, Microsoft, Paramount, Target and UPS.
The jobs report, which reflects the situation before the government shutdown as well as more recent employment data, suggests a more mixed picture of 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 sector also saw job losses totaling 25,300. Wage growth slowed and employment figures for July and August were revised downward.
Job gains in September were concentrated in the health care, hospitality and social assistance sectors.
All eyes now turn to the Federal Reserve, which will announce its next interest rate decision on December 10.
Following Thursday’s mixed jobs report in September, odds of a December rate cut increased among traders. This would provide a continued boost to the economy by making borrowing money cheaper, thereby boosting overall consumption and likely even more gains in the stock market.
