Markets are on edge again as investors position themselves for a week dominated by Nvidia’s earnings and the long-delayed September jobs report.
US equities opened the week on the back foot, with the Dow falling 1.2%, the S&P 500 down 0.9%, and the Nasdaq shedding 0.8%.
The odds of a December Fed rate cut have slid to roughly 45% amid hawkish commentary from officials, adding pressure to high-growth and AI-linked tech stocks. Nvidia was down nearly 2%, reflecting concerns over whether the AI boom can sustain Wall Street’s lofty expectations.
Not all tech saw red. Alphabet rallied about 3% after Berkshire Hathaway revealed a multibillion-dollar stake, showing selective buying is still in play even as broader sentiment sours.
European equities extended last week’s slide. The Euro Stoxx 50 lost 0.9%, while the Stoxx 600 fell 0.5%. Financials and payment firms bore the brunt of selling, with Worldline down 5% and Adyen 3%. Luxury names also lagged, with Burberry falling 6.6%, though defense stocks like Saab and Airbus offered pockets of relief.
Asia opened weaker, dragged down by soft Chinese economic data and the global tech pullback. Japan’s Nikkei dipped slightly, Hong Kong’s Hang Seng lost 0.7%, and China’s CSI 300 slid 0.7% after October industrial output and retail sales showed the slowest growth in over a year. EV names suffered, with Xpeng’s US-listed shares dropping 8% following weaker-than-expected Q4 revenue guidance.
Volatility is creeping higher, with the VIX climbing to 22.38, signaling caution without panic. Options pricing suggests a ±2% S&P move this week, highlighting the market’s sensitivity to both Nvidia’s guidance and the upcoming US jobs figures.
Crypto is under pressure too. Bitcoin has slid below $90,000, down over 30% from its October peak, while Ethereum trades below $3,000. Institutional exposure through trusts like IBIT remains modest, though flows have cooled. Solana and XRP are holding up better but are not immune to the risk-off sentiment.
The current sell-off is largely positioning-driven. Traders are de-risking ahead of key catalysts: Nvidia’s earnings will test AI valuations, and the delayed jobs report could reshape expectations for Fed policy. The moves are less about panic and more a reflection of cautious positioning, risk aversion, and a market digesting stretched valuations after a strong rally in tech.
The broader picture suggests investors are weighing a mix of slowing growth, persistent inflation risks, and the sustainability of sector-specific booms. Some interpret this as a potential correction in overvalued areas, while others see it as a temporary reset that could bring a healthier market dynamic moving forward.