AI Stock Volatility, Market Bubble Risks & Jobs Report Update
Volatile Markets: AI Stocks Plunge, Bubbles & Jobs Surprise
At a glance
- Nasdaq closed -2.16% after rising as much as +2.6% intraday.
- S&P 500 finished -1.56% after earlier climbing +1.9%.
- Dow ended -0.84% after peaking +1.56% on the day.
- AI leaders whipsawed: Nvidia flipped from +5% to -3.2% by the close; Oracle and AMD followed similar patterns.
- U.S. added 119,000 jobs in September (vs. ~50,000 expected); unemployment ticked up to 4.4%.
Market whiplash led by AI heavyweights
U.S. markets swung sharply Thursday as AI-related shares amplified broader volatility. The Nasdaq Composite reversed hard to close down 2.16%, with similar intraday reversals pulling the S&P 500 lower by 1.56% and the Dow by 0.84%.
Nvidia dominated the action: shares initially jumped 5% after CEO Jensen Huang refuted talk of an AI bubble, but finished the session down 3.2%. Oracle and AMD mirrored the day’s whipsaw pattern, underscoring investor uncertainty despite upbeat AI narratives.
Nvidia CFO Colette Kress reaffirmed the firm’s ambitious revenue target of $500 billion and noted minimal sales to China during the quarter, reinforcing confidence in core demand drivers.
Jobs surprise complicates rate-cut hopes
Economic data added to the turbulence. The U.S. reported a gain of 119,000 jobs in September, more than doubling economists’ expectations of around 50,000. Despite the beat, the unemployment rate edged up to 4.4%, the highest in nearly four years.
Investors interpreted the robust hiring as a reason for the Federal Reserve to delay rate cuts, tempering hopes for imminent monetary easing and pressuring risk assets into the afternoon.
Bubble talk: Dalio’s warning vs. Nvidia’s rebuttal
“The picture is pretty clear”—markets are in a bubble—yet Ray Dalio advises staying invested for now as a dramatic correction hasn’t materialized.
Huang pushed back on the bubble narrative, highlighting strong, tangible demand for AI infrastructure. While chip leaders showcase resilient fundamentals, sentiment remains fragile as valuations stretch and rate-cut timing looks less certain.
Global moves: Europe steadies, crypto slips
In Europe, the Stoxx 600 advanced 0.4%, with AI-centric names including ASML and BESI edging higher. Elsewhere, Bitcoin fell to its lowest level since April, adding another layer of risk-off tone to global sentiment.
Activist investor Boaz Weinstein spotlighted opportunities in UK investment trusts, pointing to valuation gaps that could reward fresh strategies amid market dislocations.
Where AI bubble risks may concentrate
While strong earnings from Nvidia underscore the vitality of leading chipmakers, some analysts caution that bubble risks may be more acute downstream—especially among companies borrowing heavily to build data centers—than among established chip leaders with clear profit engines.
Key market stats
- Nasdaq: -2.16% (intraday high +2.6%)
- S&P 500: -1.56% (intraday high +1.9%)
- Dow: -0.84% (intraday high +1.56%)
Economic snapshot
- Jobs: +119,000 in September (vs. ~50,000 expected)
- Unemployment: 4.4% (near four-year high)
- Policy tone: Fewer/ later rate cuts priced
What to watch next
- Guidance updates from AI leaders vs. downstream data-center builders.
- Fed commentary for clues on the path and pace of rate cuts.
- Follow-through in Europe’s AI supply chain and crypto volatility spillovers.
