Wall Street slumps on AI bubble fears despite Nvidia’s strong earnings, while mixed US jobs data complicates the Federal Reserve’s rate cut path
NEW YORK: Global stock markets delivered a mixed performance on Thursday as an early rally lost steam.
Investor sentiment was dampened by persistent concerns about an artificial intelligence bubble and fresh US employment data.
Europe’s main equity indices closed higher, while Wall Street slumped after opening strongly.
Asian markets also finished with mixed results during their trading session.
The session began optimistically following Nvidia’s impressive earnings report released late Wednesday.
The AI bellwether surpassed expectations amid fierce demand for its advanced chips.
Chief executive Jensen Huang directly addressed concerns about an artificial intelligence bubble that has unsettled global equities.
Jim Reid, managing director at Deutsche Bank, noted Nvidia’s results had temporarily eased some market fears.
Adam Sarhan of 50 Park Investments offered a contrasting view about current market valuations.
“When you have valuations that are this high, they’re not sustainable,” Sarhan warned.
Nvidia shares slipped 3.2% after initially rallying at the start of Wall Street trading.
The chip giant had reached a $5 trillion valuation last month before Thursday’s decline.
Positive earnings momentum was offset by new US jobs data showing the unemployment rate crept higher in September.
Hiring numbers nevertheless exceeded analyst expectations despite the rising jobless rate.
Joshua Mahony, chief market analyst at Scope Markets, assessed the Federal Reserve’s likely response.
“This report is unlikely to massively shift the needle for the December Fed meeting which looks like a pause,” Mahony said.
The dollar traded mixed against major currencies following the employment update.
Thursday’s jobs publication provided the first official labor market snapshot in over two months.
The delayed report followed a 43-day US government shutdown that ended last week.
The mixed employment data is expected to deepen divisions within the Federal Reserve.
Underlying job market weakness supports arguments for another interest rate cut.
Solid hiring figures could encourage some officials to maintain current rates for longer.
Oil prices ticked downward during the trading session.
A US Treasury official confirmed Chinese and Indian refineries and banks were complying with new sanctions.
The recently announced sanctions target Russia’s two largest oil producers, Lukoil and Rosneft.
China and India represent key buyers of Russian oil exports.
These sanctions aim to cut off revenues that fuel ongoing conflict in Ukraine.
The unnamed US official said many institutions recognize the importance of Western relationships.
These financial and energy entities are described as conscious of sanctions and risk averse. – AFP
