Wall Street stocks fell on Thursday in a sharp reversal from an early rally, as technology gains faded after a boost from Nvidia’s earnings and US jobs data muddied the labor market outlook.
The Dow Jones Industrial Average tumbled 386 points, or 0.8%, to 45,752. The blue-chip index had risen more than 700 points earlier in the session. The S&P 500 lost 1.6%, and the Nasdaq slipped nearly 500 points, or 2.2%.
Nvidia closed down 3% after surging as much as 5% earlier in the day. Most chip-related companies also turned negative, with the Philadelphia SE Semiconductor index down 3.4%.
Investors have worried about lofty technology valuations amid concerns over steep artificial intelligence spending, with the Nasdaq now sharply off its October high.
In addition, data showed the unemployment rate rose in September even as employers added more jobs than economists had expected. Traders now see an increasing chance of a Federal Reserve interest rate cut in December.
Jed Ellerbroek, portfolio manager at Argent Capital Management in St. Louis, said it is difficult to pinpoint what caused the market’s reversal.
“I expected the market to be up today just based on the strength of Nvidia’s earnings and the recent skepticism about AI investment. Nvidia’s earnings obviously dispelled a bunch of those fears,” he said.
“We’ve been in kind of a defensive type of trading action for the last two weeks, so it could be a continuation of that.”
Nvidia, the world’s most valuable company, forecast sales above analysts’ estimates for the fourth quarter and surpassed expectations for third-quarter revenue.
In addition, Nvidia CEO Jensen Huang shrugged off concerns about AI on a call with analysts, saying, “We see something very different.”
Among gainers, Walmart advanced after the retailer raised its annual forecast for the second time this year and set a December date to change its stock listing to the Nasdaq from the NYSE.
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