- After a strong market open, U.S. indices quickly lost momentum and closed the day with notable declines. The S&P 500 fell by 1.55 percent, while the Nasdaq 100 dropped by 2.2 percent, hitting the technology sector particularly hard. Initial enthusiasm following very strong results from Nvidia and rising expectations for new AI solutions such as Gemini 3 did not last long. Nvidia initially gained 6 percent but ultimately closed the session down around 3 percent, reflecting the sudden shift in market sentiment.
- The latest macroeconomic data further emphasized the Federal Reserve's cautious approach toward a potential December rate cut. September payrolls added 119,000 new jobs, more than twice the expected 50,000, while initial jobless claims fell to 220,000 compared with the forecast of 230,000.
- Such solid readings confirm the resilience of the labor market and simultaneously reduce the pressure for rapid monetary easing. For this reason, Fed officials are calling for caution, warning that premature rate cuts could sustain or even reignite inflationary pressures.
- The Japanese government approved a massive stimulus package worth 21.3 trillion yen, approximately 135 billion U.S. dollars, marking the largest program since the COVID‑19 pandemic. However, these decisions have raised concerns in financial markets due to the scale of the debt involved.
- On the Forex market, the Japanese yen stabilized around USD/JPY 157.10, gaining slightly after news of the approval of the large stimulus package by the Japanese government. Other major currencies remained within narrow trading ranges.
- Inflation in Japan remains above 2 percent, with the core CPI at 3.0 percent, the headline CPI also at 3.0 percent, and CPI excluding food and energy reaching 3.1 percent.
- In November, Japan recorded mixed PMI readings. The manufacturing sector remained in contraction for the fifth consecutive month at 48.8, improving from 48.2, while the services sector held steady at 53.1.
- Bank of Japan Governor Ueda highlighted the growing possibility of rate hikes, noting that inflation remains above the target at around 3 percent and economic forecasts are improving.
- In the Asia-Pacific equity markets, a downward trend dominates, with major indices losing value. Nikkei 225 in Japan fell by 2.4 percent, Hang Seng in Hong Kong dropped by 2.1 percent, Shanghai Composite declined by 1.9 percent, and the Australian S&P/ASX 200 fell by 1.6 percent, reaching its lowest level in five months.
- The People’s Bank of China (PBOC) set today’s USD/CNY reference rate at 7.0875, below the forecast of 7.1154.
- In the cryptocurrency market, the correction continues. Bitcoin is down around 3 percent, and other major cryptocurrencies are following suit, including Ethereum, which has fallen by over 3,5 percent. Market sentiment has also been weakened by reports that another whale closed a significant portion of their positions, further dampening the market.
- In the United States, four individuals have been charged in connection with the smuggling of Nvidia chips, fueling the debate over semiconductor supply chain controls.
Daily summary: Nvidia fails to rescue Wall Street; fears of an AI bubble push stock markets down❗
🚨US100 erases all daily gains
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Palo Alto - after Earnings
