Thursday was one of those days when good news just couldn't overcome the market's darker mood. U.S. stocks tumbled across the board, with the tech-heavy Nasdaq taking the worst of it, despite Nvidia Corp. (NVDA) delivering yet another impressive quarter and boosting its outlook.
The culprit? A hotter-than-expected jobs report that threw cold water on any hopes of near-term rate relief. Non-farm payrolls jumped by 119,000 in September, more than double the 50,000 economists had penciled in. That kind of labor market resilience makes it harder for the Federal Reserve to justify cutting rates anytime soon. According to CME FedWatch, markets are now assigning a 64% probability that the Fed keeps rates unchanged in December.
The risk-off sentiment showed up clearly in Thursday's market action. The Dow Jones shed around 387 points to close at 45,752.26. The S&P 500 dropped 1.56% to 6,538.76, while the Nasdaq Composite led the decline with a 2.15% fall to 22,078.05.
Mixed Earnings Picture
Individual stock performance painted a tale of two markets. Walmart Inc. (WMT) shares surged more than 6% after the retail giant beat earnings expectations and raised its guidance for the year. Meanwhile, Palo Alto Networks Inc. (PANW) dropped over 7% following its first-quarter results and the announcement that it would acquire Chronosphere.
Most sectors on the S&P 500 closed in negative territory, with information technology, consumer discretionary, and industrials bearing the brunt of the selloff. Consumer staples stocks were the lone bright spot, managing to buck the trend and close higher.
Looking ahead, investors are watching for earnings from BJ's Wholesale Club Holdings Inc. (BJ), IES Holdings Inc. (IESC), and MINISO Group Holding Ltd. (MNSO).
Understanding The Fear Gauge
The CNN Business Fear & Greed Index tells us what we probably already felt on Thursday: investors are genuinely spooked. The index plunged to 6.5 from a prior reading of 14.9, staying firmly planted in "Extreme Fear" territory.
For context, this index measures current market sentiment on a scale from 0 to 100. Zero represents maximum fear, while 100 signals maximum greed. It's calculated using seven equal-weighted indicators based on the idea that excessive fear tends to push stock prices down, while greed drives them up. At 6.5, we're closer to panic than optimism right now.