Friends, the US stock market unfolded with such drama this week that even experienced investors were briefly stunned. As soon as the market opened in the morning, the mood was completely positive. NVIDIA’s strong earnings and Walmart’s strong report sent the Dow Jones up 700 points. It seemed the market would only rise today, but by the afternoon, the situation had completely changed. As soon as the delayed September jobs data was released, the market rapidly began to lose its gains.
Market Condition at the End of the Day: Everything Turned Red
At the end of trading, the Dow Jones closed down 386 points, meaning the initial rally had completely vanished. Similarly, the Nasdaq fell 2.16%, and the S&P 500 fell 1.56%. Investor concerns increased because the jobs report was delayed due to the government shutdown, and the mixed data in it was enough to dampen the market mood.
The report showed 119,000 new jobs, which was better than expected, but the unemployment rate rose to 4.4%, and the July-August data also showed a decline.
Questions about the Fed’s next move: a rate cut now, perhaps in 2026?
According to James Knightley, Chief International Economist at ING, given the Fed’s recent hawkish policy and the lack of data in the next few weeks, it appears that expectations for a rate cut in December have weakened significantly.
CME FedWatch data also shows that the probability of a rate cut in December is only 40%. This means the market may have to wait until early next year.
Is the AI bubble about to burst? Experts say it’s not
There has been a lot of discussion recently about the AI bubble. Many believe that AI stocks are overvalued, just like the tech sector collapsed in 1999. However, many leading financial experts disagree.
Nancy Tengler, CEO of Laffer Tengler Investments, says:
“It’s easy to talk about bubbles, but ultimately, stocks trade on earnings.”
And NVIDIA, with its impressive results, has proven that AI isn’t just hype, but the future of strong earnings.
Mark Malek, CIO of Siebert Financial, also said:
“NVIDIA is miles ahead in its sector right now. Their results weren’t just good, but a resounding ‘we told you so’ answer.”
Corporate Earnings Remain Strong: The Market’s Real Power
According to Kristy Akullian of BlackRock, this quarter’s earnings reports are providing strong support to the market. This means that despite the decline, the market’s fundamentals remain solid. This is a positive sign for investors.
Lesson for investors: Don’t panic, make decisions with a calm mind.
These fluctuations are normal, but during such times, many people panic and withdraw their money from the market. This approach is not suitable for long-term investors. As long as the market fundamentals remain strong, it’s wise to exercise patience.
Frequently Asked Questions
Q1. Is the U.S. stock market too risky to invest in right now?
The market is volatile, yes, but long-term investors usually don’t need to panic. Many fundamentals are still sound, even though short-term swings are creating uncertainty.
Q2. Is the so-called AI bubble really going to burst?
Many analysts disagree with the bubble theory. They argue that AI companies are generating real profits and strong earnings, so calling it a “bubble” may be premature.
Q3. Could the Federal Reserve cut interest rates this year?
According to the CME FedWatch tool, there’s nearly a 40% probability of a December rate cut. So, it’s possible—but still uncertain.
Q4. Why did the September jobs report affect the market so much?
Even though the report was better than expected, the higher unemployment rate and downward revisions to previous months created concern. That uncertainty contributed to market volatility.
Q5. Should regular investors move their money into cash right now?
Some investors are shifting to cash, but that doesn’t mean everyone should. Exiting the market completely is rarely recommended. A diversified strategy often works better for long-term goals.
Disclaimer: This article is for informational and educational purposes only. It is based on current market data, expert commentary, and recent financial reports. The stock market is inherently unpredictable, and investment decisions should always be made after consulting a qualified financial advisor. This content does not promote or recommend any specific investment or financial product.
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