There are days when everything goes right and the market still decides to have a bad time. Thursday was one of those days. Nvidia Corp. (NVDA) posted another jaw-dropping quarter, crushed expectations, and raised its outlook—exactly the kind of news that normally sends Wall Street into celebration mode. Instead, major indexes took one look at the numbers, rallied briefly, then promptly reversed course and spent the rest of the day bleeding red.
The world's largest company by market cap delivered $57 billion in quarterly revenue, comfortably beating the $54.8 billion consensus estimate. Earnings came in at $1.30 per share versus expectations of $1.25. These are the kind of results that would typically have investors doing backflips. And for about five minutes, they did. Nvidia shares jumped 5% in after-hours trading Wednesday, then popped another 5% at Thursday's open.
But by midday in New York, reality set in. The stock was trading around $183.50, down 1.8% from Wednesday's close. The Nasdaq 100 tumbled 1.2% to 24,350 points, while the S&P 500 slid 0.7% to 6,600. It turns out that not even Nvidia's gravitational pull could overcome the broader risk-off mood that had the market in a chokehold.
When Good Jobs News Becomes Bad Market News
What spoiled the party? A hotter-than-expected U.S. jobs report that landed like a cold splash of water on any hopes for a tech rebound. Non-farm payrolls rose by 119,000 in September—more than double the 50,000 economists had forecast. In the upside-down world of 2024 market logic, strong employment numbers are actually bad news because they reduce the odds of the Federal Reserve cutting interest rates.
Traders quickly recalibrated their expectations. According to CME FedWatch, markets now assign a 64% probability that the Fed holds rates steady in December. That's a significant shift from earlier hopes for additional easing, and it hit growth stocks particularly hard. When borrowing costs stay elevated, future earnings get discounted more heavily, and tech valuations take the hit.
Walmart Steals the Show
While tech stocks wallowed, Walmart Inc. (WMT) emerged as the unlikely hero of Thursday's session. The retail giant surged 6% after beating earnings expectations and raising guidance for the full year. The strong performance helped lift the Consumer Staples sector to the top of the leaderboard, proving that sometimes the safest plays are the ones investors want most.
Not everyone had such a pleasant Thursday, though. Palo Alto Networks Inc. (PANW) dropped 6.4%, while Jacobs Solutions Inc. (J) plunged 9.6%. Both companies joined the growing list of earnings casualties in what's shaping up to be a challenging reporting season for anyone not named Walmart.
Semiconductors Can't Catch a Break
The semiconductor sector continued its painful slide. The iShares Semiconductor ETF (SOXX) dropped another 2% on Thursday, extending its month-to-date decline to a bruising 12%. Even with Nvidia's stellar results, chipmaker stocks couldn't find any love from investors worried about demand, geopolitical tensions, and now the prospect of rates staying higher for longer.
It's a remarkable turn of events for a sector that spent much of the past two years as the market's darling. The AI boom was supposed to create insatiable demand for chips, and by most accounts it has. But the market seems to be questioning whether the pace of growth can continue at these elevated levels, or whether we're due for some digestion after the explosive rally.
Crypto Markets Join the Selloff
The bearish sentiment wasn't confined to equities. Crypto markets took it on the chin as well:
The crypto selloff reflects the same dynamics hitting tech stocks. When risk appetite evaporates and rate cut hopes fade, speculative assets tend to get hit hardest. Bitcoin's 30% drop from its peaks is a stark reminder that even in a bull market, gravity eventually reasserts itself.
How the Major Indexes Finished
By 12:20 p.m. ET, the carnage was spread across all major indexes. The Dow Jones fell 0.5% to 45,907.21, while the Russell 2000 dropped 0.5% to 2,335.04. The S&P 500 declined 0.7% to 6,596.19, and the Nasdaq 100 led losses with a 1.2% slide to 24,353.71. Tech weakness was the common thread pulling everything lower.
Looking at the ETF landscape painted a similar picture. The Vanguard S&P 500 ETF fell 0.6% to $605.08, while the SPDR Dow Jones Industrial Average inched 0.3% lower to $459.90. The tech-heavy Invesco QQQ Trust Series dropped 1.1% to $593.20, and the iShares Russell 2000 ETF fell 0.4% to $232.38.
The sector performance told the full story: The Consumer Staples Select Sector SPDR Fund outperformed with a 0.6% gain, while the Technology Select Sector SPDR Fund lagged badly with a 1.4% loss. On days like Thursday, investors want boring and defensive, not exciting and growth-oriented.
Winners and Losers
Among Russell 1000 components, the gainers list was topped by healthcare and consumer names. Exact Sciences Corp. exploded 17.34% higher to lead all stocks. Walmart followed with its 5.69% gain, while Regeneron Pharmaceuticals Inc. added 5.43%. Solventum Corp. rose 4.65%, and Axalta Coating Systems Ltd. climbed 4.05%.
The losers list read like a rogues' gallery of disappointed traders. Bath & Body Works Inc. collapsed 25.12% after apparently missing the mark with investors. SanDisk Corp. plummeted 14.93%, while Jacobs Solutions fell 8.93%. Micron Technology Inc. (MU) dropped 8.37%, and Robinhood Markets Inc. (HOOD) declined 7.89%.
The contrast between the winners and losers is instructive. The gainers were mostly defensive healthcare plays and established retailers. The losers were concentrated in tech, consumer discretionary, and anything remotely connected to crypto. When the market gets nervous, it doesn't matter how good your earnings are—if you're in the wrong sector, you're going down.
Thursday proved once again that sometimes the macro narrative overwhelms even the best micro stories. Nvidia delivered exactly what investors wanted to see, but in a market worried about rates and risk, even perfection wasn't enough to change the mood.
