Stocks Wobble as Jobs Data Dims Rate Cut Hopes

U.S. stock markets experienced a turbulent trading session, marked by a significant swing in the Dow Jones Industrial Average before closing lower. Initial gains, fueled by positive earnings reports from tech giant Nvidia and retailer Walmart, were eroded as the delayed September jobs report was released. This employment data, which indicated 119,000 jobs were added and the unemployment rate rose to 4.4%, appeared to dampen investor hopes for a Federal Reserve interest rate cut in the near future.

The market's reaction was swift, with major indices turning negative. The Dow Jones Industrial Average finished down 386.51 points, while the Nasdaq Composite and the S&P 500 also recorded substantial losses. The benchmark 10-year Treasury yield decreased to 4.098%. The jobs report, originally scheduled for early October but delayed by a government shutdown, presented a mixed picture with stronger-than-expected job creation but downward revisions for prior months.

Analysts are now contemplating the Federal Reserve's next move, with some suggesting that rate cuts may not occur until early 2026, particularly given recent hawkish signals from the central bank. Despite concerns about an "AI bubble," strong corporate earnings, exemplified by Nvidia's performance, are cited as a key factor supporting stock valuations, with overall third-quarter earnings growth significantly exceeding initial expectations.