Jarring swings keep rocking Wall Street, and U.S. stocks erased a big morning gain to drop Thursday as the market remains skittish following weeks of doubts and erratic moves.<\/p>\n
After initially soaring toward what seemed like its best day since May, with an early surge of 1.9%, the S&P 500 erased all of it and fell 1.6%. The Dow Jones Industrial Average dropped 386 points, or 0.8%, and the Nasdaq composite sank 2.2%. <\/p>\n
The sharpest losses again hit what used to be the market\u2019s biggest winners. Nvidia, cryptocurrencies and other areas that had soared with nearly relentless momentum, as traders feared missing out on more gains, forced the market lower. Bitcoin dropped below $87,000, down from nearly $125,000 last month.<\/p>\n
The market had been shaky before Thursday, largely because of twin worries: Nvidia and other superstar stocks caught up in the frenzy around artificial-intelligence technology simply may have shot too high, and the Federal Reserve may be done delivering the invigorating cuts to interest rates that Wall Street loves. <\/p>\n
Nvidia initially appeared to tamp down the worries about a bubble for AI stocks after reporting a big profit for the summer, along with a forecast for coming revenue that easily cleared analysts\u2019 expectations. By delivering strong profits and indicating more are coming, Nvidia can justify its stock\u2019s price gains and make it look less expensive.<\/p>\n
Given Nvidia\u2019s forecasts, \u201cit is very hard to see how this stock does not keep moving higher from here,\u201d according to analysts at UBS, led by Timothy Arcuri. They also said \u201cthe AI infrastructure tide is still rising so fast that all boats will be lifted.\u201d <\/p>\n
Nvidia jumped to an early gain of 5% but then dropped to a loss of 3%. Because Nvidia is the biggest company in the U.S. market by value, its stock has more pull on the S&P 500 than any other company\u2019s. <\/p>\n
Despite Nvidia\u2019s big numbers, worries about a potential AI bubble aren\u2019t gone. The concern among investors is that all the dollars pouring into AI chips and data centers ultimately may not produce the big profits and productivity for the economy that proponents have been promising. <\/p>\n
Yes, Nvidia expects to sell another $65 billion of chips in the coming three months, which is more than analysts expected. But will all those chips actually create much bigger profits for Amazon and other companies using them? That question \u2014 whether all the investment in AI will prove to be worth it in the end \u2014 still is unanswered. <\/p>\n
The most recent survey of global fund managers by Bank of America showed a record percentage of investors saying companies are \u201coverinvesting.\u201d<\/p>\n
Amazon went from an early gain of 2.1% Thursday to a loss of 2.5%. Palantir Technologies swung from a jump of 5.5% to a loss of 5.8%.<\/p>\n
The last time the overall stock market had swings in one day as wild as Thursday\u2019s was in April, when President Trump shocked the world with his stiff \u201cLiberation Day\u201d tariffs. <\/p>\n
For the second worry that\u2019s been dogging Wall Street, interest rates, Thursday\u2019s jobs report from the U.S. government came in mixed and offered some relief. Financial markets initially seemed to pick the data apart for encouraging signals, according to Seema Shah, chief global strategist at Principal Asset Management.<\/p>\n
The report showed hiring by U.S. employers was stronger in September than economists expected, which may suggest the economy remains solid. But it also said the unemployment rate worsened slightly, which could give the Fed reason to cut its main interest rate at its next meeting in December.<\/p>\n
Traders still see a December rate cut as relatively unlikely, giving it a roughly 40% probability, according to data from CME Group. But that\u2019s better than the 30% chance they saw a day earlier.<\/p>\n
What the Fed does is critical for the stock market because prices ran to records in part because of expectations for continued rate cuts. The Fed already cut rates twice this year to shore up the slowing job market. But lower rates can worsen inflation, which stubbornly has remained above the Fed\u2019s 2% target. <\/p>\n
On the winning side of Wall Street was Walmart, which rallied 6.5% after the retailer delivered another standout quarter. It reported strong sales and profits that blew past Wall Street expectations as it continues to lure cash-strapped Americans nervous about the economy and prices.<\/p>\n
That wasn\u2019t enough to drown out the losses for Nvidia and tech. Companies enmeshed in the crypto industry also tumbled, as bitcoin dropped to its lowest price since April. Robinhood Markets fell 10.1%, and Coinbase Global sank 7.4%. <\/p>\n
All told, the S&P 500 fell 103.40 points to 6,538.76. The Dow Jones Industrial Average dropped 386.51 to 45,752.26, and the Nasdaq composite sank 486.18 to 22,078.05.<\/p>\n
In the bond market, the yield on the 10-year Treasury eased to 4.09% from 4.13% late Wednesday. <\/p>\n
In stock markets abroad, indexes rose across much of Europe and Asia. Japan\u2019s Nikkei 225 jumped 2.6%, and South Korea\u2019s Kospi rose 1.9% for two of the bigger gains. <\/p>\n
Choe writes for the Associated Press. <\/p>\n","protected":false},"excerpt":{"rendered":"Jarring swings keep rocking Wall Street, and U.S. stocks erased a big morning gain to drop Thursday as…\n","protected":false},"author":2,"featured_media":63405,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[38176,38173,38177,38174,38178,17652,48,52,51,47,50,49,5990,10651,38175,38171,7037,2429,38172,7038,9265],"class_list":["post-63404","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-big-company","tag-big-profit","tag-datum-center","tag-fed-reason","tag-good-day","tag-interest-rate","tag-la","tag-la-headlines","tag-la-news","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news","tag-market","tag-nvidia","tag-overall-stock-market","tag-sharp-loss","tag-stock","tag-thursday","tag-u-s-stock","tag-wall-street","tag-worry"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/63404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=63404"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/63404\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/63405"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=63404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=63404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=63404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}