U.S. stocks fell back into negative territory Thursday afternoon, reversing a strong rally that followed strong quarterly results from Nvidia and a September jobs report that beat expectations.
At noon, the Dow Jones Industrial Average was down approximately 60 pointseither 0.1%he S&P 500 slipped 0.2%and the Nasdaq Composite refused 0.3%.
These declines erased a strong start to the session, when all three major indexes rose sharply on the back of technology gains and strong economic data.
By early morning, the Dow Jones had risen 1.2%the S&P 500 won 1.8%and the Nasdaq jumped 2.5%reflecting early enthusiasm around Nvidia’s performance and the stronger reading of the labor market.
Nvidia’s blockbuster earnings lose momentum after initial surge
Actions of NVIDIAnow one of the most valuable companies in the world with a market capitalization close to 4.7 trillion dollarsslipped 0.1% at noon.
This came after shares rose earlier in the session following a quarterly report that once again beat expectations.
Nvidia’s numbers temporarily eased concerns about whether AI-linked stocks had risen too much, too fast. In recent days, some investors warned that the rapid rise in infrastructure and AI chip names looked like a speculative bubble. Nvidia’s results countered those fears in the near term, showing continued demand for its high-end chips used in data center systems and artificial intelligence training.
Even with the midday pullback, the company remains a major contributor to Market performance in 2025:
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S&P 500 above 15% this year
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Dow above 10%
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Nasdaq above 19%
Much of this strength has been tied to companies whose products are fundamental to AI computing.
September jobs report provides boost, with warning sign
Thursday’s rally was also fueled by a new hiring report that showed much stronger job creation than economists expected.
He US added 119,000 jobs in Septemberaccording to the Bureau of Labor Statistics.
This reading is above both the consensus forecast and the average pace of earnings seen earlier this year.
But the improvement came with a notable revision:
The initial estimate from August 22,000 jobs gained was corrected to 4,000 jobs lost.
The updated figure highlights how uneven the labor market has been in recent months, even with September’s rebound.
Hiring had slowed for much of the summer, raising concerns that employers were cutting back as inflation remained persistent and borrowing costs remained high. Thursday’s report offered a partial counterweight to those concerns.
Walmart results show that consumers continue to spend
Walmart on Thursday reported quarterly revenue that beat expectations. The company said it saw steady traffic in stores and continued growth in online orders.
Traders said the report suggests many households are still spending on everyday items, even with higher prices than a year ago.
Walmart’s results helped offset concerns that shoppers had begun cutting back sharply in recent months. The company’s update was seen as one of the few clear reads on how consumers handled higher costs heading into the fall.
Fed and inflation update
Inflation has risen in recent months while hiring has slowed, creating a mix that economists say could hit both households and businesses. Some analysts have described the risk as a version of “stagflation,” in which prices rise while economic activity weakens.
He Federal Reserve has responded to this uncertainty by cutting interest rates in a quarter point in each of its last two meetings.
Those cuts were linked to signs of weakening hiring earlier in the year.
Thursday’s economic data influenced expectations about the central bank’s next decision:
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probabilities of a quarter point cut next month got up from 33% on Wednesday
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to 43% Thursday morning, according to the CME FedWatch tool
This change suggested that investors viewed the new data (both hiring and earnings) as potentially giving the Federal Reserve more room to ease policy.
Midday drop after strong start
Shares fell even after a strong open, with traders pointing to specific developments during the session that changed momentum.
Tech stocks lost initial strength
Nvidia’s rise cooled as the morning progressed, dragging several big tech names with it. The pullback erased much of the initial jump for the Nasdaq, which had gained more than 2% at the open.
Revised labor numbers add caution
While hiring in September was strong, the sharp downward revision through August raised concerns about how stable the labor market really is. Some traders said the revision limited the boost normally expected from a strong monthly report.
Inflation concerns remain in focus
Recent inflation readings continued to weigh on the market. Investors said the combination of higher prices and the earlier revision to August jobs made the morning’s optimism difficult to sustain.
Interest rate expectations changed throughout the day
Rate cut expectations rose after the jobs report, but traders said uncertainty over the Federal Reserve’s next move kept buyers from holding on to early gains. The view that the Federal Reserve could still wait for more data led some investors to reverse the morning rally.
Afternoon operations lost initial momentum
Stocks weakened in the afternoon after losing the boost they had received from Nvidia and the morning’s jobs data. Nvidia’s initial jump faded throughout the session, and several other big tech stocks followed the same pattern, pushing the Nasdaq and S&P 500 lower.
Revised August hiring numbers also drew attention once they circulated more widely during the day. The update showed a loss rather than a gain for that month, prompting some investors to reassess the strength of the previous employment reading.
Bond yields rose slightly in the early afternoon, adding pressure to parts of the market that had recovered in the morning. Some investors said the move made short-term trading less attractive and contributed to the stock’s decline.
Market activity now depends on the next round of government data, including updated inflation figures due out next week, which will influence how investors position themselves ahead of the next Federal Reserve meeting.
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