Technology shares staged a sharp pullback on Thursday, erasing early-session strength as investors grew increasingly cautious ahead of the Federal Reserve’s upcoming interest rate announcement.
Nvidia initially powered the market higher after reporting strong third-quarter results and issuing an optimistic outlook. Its surge helped lift the Dow Jones Industrial Average by nearly 720 points at one stage and pushed the S&P 500 up about 1.9%.
However, the momentum did not last. As selling pressure spread across the broader market, Nvidia’s rally collapsed, with the stock ending the day down roughly 3.2%. The decline also put Nvidia on track for a 10.8% drop in November, positioning the month to be its weakest since March.
By the closing bell, the Dow had reversed course to finish 386 points lower, a decline of around 0.8% to 45,752.26 points. The S&P 500 slid 1.6% to 6,538.76 points, and the tech-focused Nasdaq Composite fell nearly 2.2% to 22,078.04 points. Bitcoin also retreated, hitting its lowest level since April 21.
Market sentiment took an additional hit from delayed U.S. employment figures. The data showed stronger-than-anticipated job gains for September but also highlighted ongoing inconsistencies in the labor market, with the unemployment rate unexpectedly soft. Following the release, expectations for a Fed rate cut in December remained muted. According to the CME FedWatch Tool, traders were pricing in only about a 39% probability of a quarter-point reduction next month.
Despite solid job creation in September, the U.S. unemployment rate climbed to 4.4%, reaching a level not seen since October 2021, the Labor Department reported Thursday. While employers added 119,000 jobs last month—far above economists’ estimates of 50,000 in a Reuters poll—August data were revised downward to reflect a loss of 4,000 positions, the second decline recorded this year. The higher jobless rate, up from 4.3% in August, was attributed to an expansion in the labor force as more Americans sought employment opportunities.
Separate Labor Department data indicated that layoffs remained subdued into mid-November, signaling a labor market that, while not accelerating, continued to show relative stability. The release of this month’s employment report had been postponed due to a 43-day federal government shutdown. Because of the shutdown—the longest on record—the Bureau of Labor Statistics canceled its usual October release, having been unable to collect household survey data. The agency announced that October figures will be combined with November’s numbers in a report expected December 16.
