Wall Street Shuns Risk Ahead of Nvidia, Jobs Data: Markets Wrap
(Bloomberg) — Wall Street traders gearing up for Nvidia Corp.’s earnings and a key jobs report refrained from making big bets as both events will be key in shaping the outlook for markets throughout the rest of 2025.
As stocks retreated, bonds and the dollar rose. While the S&P 500 is on track to halt a streak of six months of gains, that could change if investors get reassurance on prospects for artificial intelligence and Federal Reserve interest-rate cuts — the two main pillars of the bull market.
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“The monthly jobs report would normally dominate this week’s economic calendar, but with the AI trade struggling the past couple of weeks, Nvidia’s earnings are once again looking like a key piece of the market’s momentum puzzle,” said Chris Larkin at E*Trade from Morgan Stanley.
Nvidia’s report on Wednesday will be picked over investors increasingly uneasy over stratospheric AI valuations even though the chipmaker is widely expected to deliver another earnings beat.
A day later, the September jobs report will be released after it was delayed due to the government shutdown. Fed Vice Chair Philip Jefferson said he sees risks to the labor market as skewed to the downside, but warned policymakers need to proceed slowly.
Scrutiny of Walmart Inc. and Target Corp. results will also be heightened as investors seek clues on consumer appetite and the broader economy amid economic data gaps due to the prolonged US government shutdown.
The S&P 500 hovered near 6,700, again testing its 50-day moving average. Nvidia slipped as Peter Thiel’s hedge fund Thiel Macro LLC sold off its entire stake in the chipmaker last quarter. Alphabet Inc. climbed as Warren Buffett’s Berkshire Hathaway Inc. built a $4.9 billion stake in the third quarter.
The yield on 10-year Treasuries declined two basis points to 4.13%. The dollar rose against all major currencies.
“More clarity is coming this week with Nvidia’s earnings and the delayed release of the September jobs report on Thursday, but these events have the potential to spike volatility even further,” said Dennis Follmer at Montis Financial.
A series of circular, multibillion-dollar deals between AI chipmakers, startups, data center operators and others across the tech ecosystem have further stoked concerns that the industry is propping up itself.
An analysis of 13F filings from 909 hedge funds found an even split of investor sentiment on Nvidia: 161 increased their investment positions in the giant chipmaker, while 160 decreased them during the three months to September. Opinions remain divided about the prospects for AI companies, which continue to raise and spend funds at elevated rates but have yet to demonstrate monetization models that would pay off the lofty investments.
Tom Essaye points to the rising number of opinions doubting the sustainability of the AI capex boom is leading to a rise in skepticism. Now, investors expect strong Nvidia earnings to quell the recent uptick in AI uncertainty.
“But what if that doesn’t happen? What if Nvidia results aren’t good enough to stop this modest increase in AI skepticism? In that case, can the rest of the market hold up while tech/AI decline?” noted the founder of The Sevens Report. “History implies it’s not likely, but it is possible.”
Corporate Highlights:
Peter Thiel’s hedge fund Thiel Macro LLC sold its stake in Nvidia Corp. during the third quarter, marking yet another retreat from investments in the world’s leading provider of artificial-intelligence chips. Warren Buffett’s Berkshire Hathaway Inc. acquired 17.9 million shares of Google parent Alphabet Inc. during the third quarter, while further trimming its holdings in Bank of America Corp. and Apple Inc. Google DeepMind has released a new artificial intelligence weather model that it says is faster and more accurate than anything it’s built before, while providing additional tools for energy traders. Amazon.com Inc. is seeking to raise about $12 billion through a bond sale — its first such deal in US dollars in about three years — adding to a wave of massive technology debt offerings as companies race to fund artificial intelligence infrastructure. Ford Motor Co. has struck a deal with Amazon to sell certified used cars through its e-commerce website, becoming the second major automaker to reach customers through the massive online retailer. A memory “supercycle” increasingly poses a risk to earnings of hardware original equipment and design manufacturers (OEMs and ODMs), Morgan Stanley analysts wrote as they cut ratings on HP, Dell, Pegatron and Asustek to underweight. KKR & Co. agreed to purchase as much as €65 billion ($75.4 billion) of buy-now, pay-later loans from PayPal Holdings Inc. as part of an extension of a two-year-old agreement between the two companies. Johnson & Johnson has agreed to buy the cancer treatment biotech Halda Therapeutics for $3.05 billion cash, part of a strategy to cope with eroding sales for its major psoriasis drug. Novo Nordisk A/S is undercutting arch-rival Eli Lilly & Co. on obesity drugs for cash-pay patients, showing its willingness to compete on price as it tries to claw back a larger share of the US market. UBS Group AG Chairman Colm Kelleher held talks with US Treasury Secretary Scott Bessent about potentially moving the bank’s headquarters to the US amid the ongoing uncertainty over Switzerland’s upcoming capital reforms, the Financial Times reported. Societe Generale SA unveiled a €1 billion ($1.2 billion) share buyback, a boost for investors who have been holding out for more payouts. Euronext NV has secured the minimum threshold required to acquire Hellenic Exchanges, according to people familiar with the matter, clearing the way for the bourse to further expand its reach in Europe. Siemens Healthineers AG is studying options for its Diagnostics business that could include a future sale, a few days after former parent Siemens AG said it plans to reduce its majority holding in the maker of MRI scanners. TotalEnergies SE agreed to buy a 50% stake in a portfolio of European power assets for about €5.1 billion ($5.9 billion), expanding in the sector even as some major oil and gas peers retreat. Sea Ltd. shares gained after the Southeast Asian internet giant unveiled its first buyback program, taking advantage of an almost 30% plunge in its stock price to reward investors. Geely Automobile Holdings Ltd.’s profit climbed on the back of an ongoing discounting campaign that turbo-charged sales even as China’s regulator has stepped up scrutiny on price wars. What Bloomberg Strategists say…
“The artificial intelligence narrative is starting to look less convincing for investors who are questioning the big-spending industry’s ambition. Nvidia’s quarterly earnings Wednesday offer the next chance to scrutinize AI and, if recent history is any guide, traders will treat it as an excuse to take profit.” — Sebastian Boyd, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.1% as of 10:20 a.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average was little changed The Stoxx Europe 600 fell 0.3% The MSCI World Index fell 0.2% Bloomberg Magnificent 7 Total Return Index rose 0.3% The Russell 2000 Index fell 0.2% Nvidia fell 1.9% Alphabet rose 4.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1590 The British pound was little changed at $1.3168 The Japanese yen fell 0.4% to 155.21 per dollar Cryptocurrencies
Bitcoin rose 0.5% to $93,921.12 Ether rose 1.4% to $3,115.88 Bonds
The yield on 10-year Treasuries declined one basis point to 4.13% Germany’s 10-year yield declined one basis point to 2.71% Britain’s 10-year yield declined three basis points to 4.54% The yield on 2-year Treasuries was little changed at 3.61% The yield on 30-year Treasuries declined one basis point to 4.73% Commodities
West Texas Intermediate crude fell 0.3% to $59.88 a barrel Spot gold fell 0.5% to $4,064.58 an ounce ©2025 Bloomberg L.P.
