Wall Street Volatility Persists as Nvidia Rebounds Slightly/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street remained shaky Friday following a major sell-off, with Nvidia, bitcoin, and gold all experiencing volatile swings. The S&P 500 dipped as investors eyed high valuations, interest rate uncertainty, and upcoming earnings reports. Analysts say tech stocks and Fed policy remain key drivers of market sentiment.
Wall Street Volatility Continues: Quick Looks
- S&P 500 drops 0.5% after steep early losses
- Dow falls 485 points; Nasdaq also in the red
- Nvidia rebounds after early losses, briefly boosts tech sector
- Bitcoin slips below $95,000; gold tumbles nearly 3%
- Walmart down after CEO Doug McMillon announces retirement
- Investors await Nvidia earnings report next week
- Fed’s December rate decision now in question
- Treasury yields steady as uncertainty rises
- Global markets slide; South Korea and UK see steep drops
Wall Street Volatility Persists as Nvidia Rebounds Slightly
Deep Look
Wall Street extended its slide on Friday, one day after suffering one of its sharpest drops since the spring. Investors remain on edge as heavyweight stocks like Nvidia swing dramatically, and concerns over interest rates, inflation, and valuation bubbles weigh on sentiment.
The S&P 500 fell 0.5%, after recovering from an early decline of 1.3%. The Dow Jones Industrial Average dropped 485 points (or 1%), while the Nasdaq composite slid 0.4% as of mid-morning.
Nvidia Leads the Market Narrative
Nvidia, now emblematic of the AI-driven rally, saw its stock flip from a sharp 3.4% decline at the open to a modest 0.1% gain, helping stabilize broader tech stocks. With Nvidia becoming Wall Street’s most valuable stock, briefly surpassing $5 trillion, its daily performance holds outsized influence over the broader S&P 500.
But Nvidia’s meteoric rise has critics warning that the stock market is overheating. The chipmaker’s stock has more than doubled in four of the past five years, largely fueled by excitement around artificial intelligence. With its earnings report due next Wednesday, the pressure is high. A miss on expectations could rattle the entire market.
“Occasional market drops are the price of the ticket for the ride,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Broader Economic Concerns Weigh Heavy
Market volatility is also being driven by uncertainty around Federal Reserve policy. After cutting rates twice this year, the Fed was widely expected to deliver a third rate cut at its December meeting. But recent comments from Fed officials have cast doubt on that timeline.
The delay of key economic data due to the recent government shutdown has left the Fed flying partially blind. And with inflation still above the 2% target, policymakers may opt to pause until more clarity emerges.
Meanwhile, bond yields held steady Friday, with the 10-year Treasury yield flat at 4.11%, the same as late Thursday.
Bitcoin and Gold See Sharp Reversals
Investors looking beyond equities also faced headwinds. Bitcoin briefly dropped below $95,000, retracing gains from earlier this fall when it approached $125,000. Cryptocurrency prices typically benefit from lower interest rates, so rising uncertainty about monetary policy has added pressure.
Gold, another traditional hedge against inflation and economic instability, fell nearly 3%. While gold had hit record highs earlier this year amid fears of inflation and mounting government debt, higher interest rates diminish its appeal, as it offers no yield compared to bonds.
Corporate Moves and Market Reaction
Outside of tech, retail giant Walmart slipped 1.5% following the unexpected announcement that CEO Doug McMillon will retire in January. McMillon has been instrumental in steering the company’s digital transformation.
His departure adds another layer of uncertainty in a retail sector already contending with changing consumer habits and economic pressures.
Global Sell-Off Continues
Market stress wasn’t limited to the U.S. European and Asian markets also saw widespread declines:
- South Korea’s Kospi plunged 3.8%
- London’s FTSE 100 dropped 1.5%
- Other regional markets, including Japan and Germany, also closed lower
The sell-off abroad underscores broader concerns about global economic health, elevated valuations, and geopolitical risks.
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