Stock Market Soars: 5 Key Drivers Behind Today’s Record Rally—and What Investors Should Do Now

Wall Street recoiled from early gains Thursday as investors digested red-hot jobs data and fading enthusiasm around Nvidia’s record results. By 12:15 p.m. ET, the Dow Jones Industrial Average slipped 0.30% to 46,000.74, the S&P 500 sagged 0.46% to 6,611.59, and the tech-heavy Nasdaq Composite retreated 0.64% to 22,419.92. Chipmaker Nvidia had soared as much as 5% after projecting another quarter of blockbuster AI revenue, but shares reversed to a 1% loss as traders questioned the sustainability of sky-high valuations. The broader Philadelphia Semiconductor Index fell 2.1%, underscoring concerns that the year-long AI rally may be running out of steam. Fresh macroeconomic surprises added pressure. September non-farm payrolls grew by 119,000—more than double economists’ 50,000 estimate—while the unemployment rate ticked up to 4.4%. The mixed report tempered expectations for a Federal Reserve rate cut at December’s meeting, keeping bond yields elevated and growth stocks on the defensive. Megacap names mirrored the wobble: Amazon slipped 0.8%, while the S&P 500 Information Technology sector gave back an early pop to trade 1% lower. Retail giant Walmart bucked the trend, jumping 6% after hiking its full-year outlook and announcing plans to transfer its listing to the Nasdaq, a move seen as a vote of confidence in the index despite Thursday’s pullback. Market breadth deteriorated as decliners outpaced advancers 1.35-to-1 on the NYSE and 1.2-to-1 on the Nasdaq. New lows outnumbered highs within the tech-centric composite, signaling mounting profit-taking after months of outsized gains. Looking ahead, traders will parse upcoming inflation prints and November’s combined jobs release—delayed by a Bureau of Labor Statistics methodology change—for clues on whether the Fed can pivot to easing in early 2026. Until then, volatility may remain elevated as participants weigh sizzling labor momentum against fears of an AI-driven equity bubble.