By Mucahithan Avcioglu
ISTANBUL (AA) - US stocks ended with losses Thursday, after a rally caused by Nvidia's better-than-expected third-quarter results was dragged down by declining expectations of a rate cut by the Federal Reserve.
The Dow Jones Industrial Average fell 0.84%, or 386.51 points, to close at 45,752.26.
The Nasdaq tumbled 2.15%, or 486.18 points, to 22,078.05, while the S&P 500 lost 1.56%, or 103.40 points, to 6,538.76.
The Volatility Index (VIX), also known as the "fear index," soared 11.67% to 26.42.
The market as a whole fell as a result of Nvidia's reversal, falling 3.15%. Following the chipmaker's better-than-expected quarterly earnings and an optimistic fourth-quarter sales estimate Wednesday, shares had increased by 5%. Also CEO Jensen Huang denied the notion of an "AI bubble," stating that demand for its current-generation Blackwell chips is "off the charts."
However, given worries over AI stock valuations, particularly if the Fed doesn't cut interest rates, the outstanding results were insufficient to maintain the stock or the market up.
The September jobs report that was postponed due to the government shutdown and revealed that the economy added 119,000 jobs—more than economists had predicted—added to the downward pressure.
Investors' wagers on lower interest rates were negatively impacted by the data, as the most recent Fed funds futures trade revealed fewer than 40% odds that the central bank would slash rates for a third time this year next month.
On the other hand, Walmart shares increased 6.5% following better-than-expected sales and revenue for its fiscal third quarter and the expansion of its e-commerce operation.
While statements from Fed officials are also being monitored, Cleveland Fed President Beth Hammack stated that a moderate and somewhat restrictive policy stance must be maintained to continue reducing inflation to the 2% target.
Fed Board Member Michael Barr emphasized that the bank should proceed cautiously when considering further interest rate cuts.
On the other macroeconomic data side, the US unemployment rate was at 4.4% in September, up from 4.3% monthly and above expectations of 4.3%.
The number of initial jobless claims was at 220,000 in the week ending Nov. 15, down by 8,000 from the previous week.