Wall Street has registered more falls this Tuesday (Dow Jones:-1.07%; S&P500: -0.83%; Nasdaq:-1.21%) As the concerns with the high ratings of the artificial intelligence (AI) and investors lower expectations of a new rate cut from the Federal Reserve (Fed) at its meeting next December. «Some of the most optimistic vibes -the enthusiasm for AI, the huge government stimuli, the moderate expectations of central banks- are starting to fade«explains Ipek Ozkardeskaya, senior analyst at Swissquote. And for the expert, first of all, Interest in AI pressured by bubble fears. «Then there’s the Fed. Moderate expectations are crumbling. The market increasingly doubts a rate cut in December; Futures suggest it’s less likely than expected, and even positive political news (such as Trump’s reduction of tariffs on beef, tomatoes and bananas) might not be enough to give the central bank the green light.» In fact, the probability of a decline at the Fed’s last meeting of the year it has fallen to 46%according to CME’s FedWatch tool, compared to 93.7% a month ago. «This decline responds, to a large extent, to the statements by various members of the Fed in recent days, which reflected growing uncertainty and divergent positions regarding the orientation of monetary policy for the end of the year. While the most dovish members, such as Daly and Miran, were in favor of considering additional cuts, other officials – among them Musalem, Hammack and Collins – pointed out that there are few arguments to continue with the flexibility, especially in the face of still high inflation and signs of resilience in economic activity,» assesses Jessica Steuer, head of fixed income and structured income at Tressis.
EMPLOYMENT IS BACK ON THE SCENE
After the reopening of the US Government, the market once again has macro references as the different federal agencies update the calendar of the data that remained pending publication due to the administrative impasse. Thus, this Thursday the September employment reportwhich is expected to show the creation of 50,000 new jobs from 22,000 the previous month. Additionally, the unemployment rate is anticipated to remain stable at 4.3%. But first, this Tuesday, the agenda has included the weekly employment variation prepared by the consulting firm ADP based on a four-week moving average, and which has revealed a loss of 2,500 jobs a week. «While the data lacks detail, it appears that Companies have delayed hiring temporary workers for the holidayswhich are usually hired between October and November. These delays could distort seasonal adjustment factors, affecting both weekly and monthly employment data,» Danske Bank said.
COMPANIES AND OTHER MARKETS
At the business level, Nvidia is the great protagonist of the week, since this Wednesday it will present its accounts at a time of «negative feeling» with AI. «For the first time in several quarters, Nvidia faces the presentation of results with negative sentiment. The shares have fallen on the concern about a possible bubble in AI and the unlikely recovery in sales in China in the short term,» highlights Matt Britzman, senior equity analyst at Hargreaves Lansdown. «However, underlying outlook remains strongwith revenues for the third quarter that are expected to be close to the upper limit of forecasts, around $55 billion, and with room for a positive surprise,» he adds. In the results chapter, retailers also enter the scene with the figures for Home Depotwhich has cut annual forecasts, Lowe’s (Wednesday) or Walmart (Thursday) and that will allow us to measure the health of the American consumer ahead of the Christmas season. In other markets, oil West Texas has risen 1.49% ($60.84) and the Brent has advanced 1.16% ($64.96). For his part, the euro has depreciated 0.09% ($1.1579), and the ounce of gold has lost 0.11% ($4,470). Furthermore, the 10-year American bond yield has relaxed to 4.117% and the bitcoin has added 1.16% ($92,794).
