Market experiences intense volatility on Wednesday: NVIDIA's earnings boost US stocks' rebound, Federal Reserve policy shift draws attention

Tech Giants Lead Rebound, AI Chipmakers Turn Market Expectations Around

This week’s stock market experienced a significant turning point. US artificial intelligence chipmaker NVIDIA delivered an impressive third-quarter earnings report, which not only alleviated market concerns about an AI industry bubble but also served as a catalyst for the market’s stabilization and recovery. According to the financial report, NVIDIA’s net profit for Q3 reached $31.91 billion, a 65% year-over-year growth; revenue totaled $57.01 billion, surpassing analyst expectations. Notably, the data center business revenue hit $51.2 billion, a substantial 66% increase year-over-year.

CEO Jensen Huang revealed at the earnings conference that sales of the Blackwell architecture far exceeded expectations, with all GPU units for cloud computing sold out, indicating a supply shortage. The group is even more optimistic about Q4, projecting revenue of $65 billion, with gross margin maintained at a high level between 74.8% and 75.0%. CFO Kress stated during an analyst call that, based on the enormous potential of Blackwell and Rubin chips, NVIDIA is confident in achieving its long-term revenue target of $500 billion. This strong performance caused NVIDIA’s stock to surge over 6% in after-hours trading, ultimately closing up 2.9%.

Meanwhile, leading the tech stocks higher, the three major US indices posted gains. The Nasdaq rose 0.59%, the S&P 500 increased 0.38%, and the Dow Jones gained 0.10%. Alphabet, Google’s parent company, received positive market feedback for its newly launched Gemini 3 AI model, with its stock soaring as much as 6.9 intraday, marking the largest single-day increase in two months and reaching a new high. In contrast, Microsoft and Meta performed more modestly, falling 1.35% and 1.23%, respectively.

Diverging Federal Reserve Policy Stances, December Rate Cut Odds Significantly Reduced

The Federal Reserve’s October policy meeting minutes revealed serious disagreements within the decision-making body regarding interest rate cuts, casting a shadow over future monetary policy directions. The minutes noted that while a few officials considered a possible rate cut in December, most preferred to pause rate adjustments. Several participants mentioned that continued easing could risk fueling inflation, which remains above the Fed’s 2% target.

According to the latest CME FedWatch Tool, the probability of a 25 basis point rate cut in December has sharply declined from 48.9% the previous day to 32.7%, while the chance of holding rates steady has risen to 67.3%. Looking ahead to January, the market estimates a 49.9% chance of a cumulative 25 basis point rate cut. This indicates a cooling of market expectations for further easing by the Fed.

The minutes also showed differing views among officials on the current degree of monetary tightening. Some believe that even after rate cuts, the policy’s restraining effect on the economy remains too strong; others think the economy remains resilient and that policy is not overly tight. This divergence reflects the dilemma policymakers face in balancing inflationary pressures against employment softness.

Employment Data Delay, US Trade Deficit Significantly Narrowed

Due to the federal government budget crisis, the US Bureau of Labor Statistics announced it could not release the October non-farm payroll report as scheduled; the data will be incorporated into November’s statistics. The new release date for November employment data has been postponed to December 16, six days after the end of the Fed’s December meeting. This delay will postpone the market’s understanding of the latest US labor market conditions.

On the other hand, the US Commerce Department’s August trade data released positive signals. The goods and services trade deficit was $59.6 billion, a significant month-over-month decrease of $18.6 billion, or 23.9%. Exports of goods and services reached $280.8 billion, while imports fell 5.1% to $340.4 billion. The goods trade deficit decreased by $18.1 billion to $85.6 billion, mainly due to a sharp decline in industrial raw material imports, with non-monetary gold imports dropping $9.3 billion.

Global Financial Markets Diverge, US Dollar Strengthens, US Stocks Lead

European stock markets underperformed, with Germany’s DAX down 0.08%, France’s CAC 40 down 0.18%, and the UK’s FTSE 100 down 0.47%, contrasting sharply with the strength of US stocks. In the bond market, the US 10-year Treasury yield was approximately 4.139%, up 2 basis points from the previous trading day.

In the forex market, the US dollar index rose strongly by 0.52% to 100.1, regaining the 100 level. The USD/JPY surged 1.06% to 157.18, reaching a new 10-month high, reflecting increased dollar appreciation against the yen. The euro/USD declined 0.37%. Commodities saw gold rise slightly by 0.24% to $4,077 per ounce, while WTI crude oil fell 1.92% to $59.4 per barrel.

In the cryptocurrency market, Bitcoin hovered around (91474) USD, down 1.55% over 24 hours, barely holding above the $90,000 mark; Ethereum is at $3025, down 3.16% in the same period.

Industry Developments: NVIDIA Turns to Mobile Chips, Musk Partners with NVIDIA in Saudi Arabia

Market research firm Counterpoint Research released a report indicating that NVIDIA has decided to adopt low-power LPDDR chips (commonly used in smartphones and tablets) in AI servers to replace traditional DDR5, aiming to reduce power consumption costs. Since each AI server requires far more chips than a smartphone, this shift is expected to cause a surge in demand for LPDDR, with industry forecasts suggesting server memory prices could double by the end of next year. This change may prompt chip manufacturers to adjust their capacity allocations.

Elon Musk’s xAI and NVIDIA recently announced a partnership to build a 500-megawatt ultra-large AI data center project in Saudi Arabia. NVIDIA CEO Jensen Huang and Musk reached this cooperation during the US-Saudi investment forum in Washington. Local Saudi company Humain is also involved in the project. Notably, Saudi Arabia has increased its investment commitment to the US from an initial $600 billion to $1 trillion.

Alphabet’s Gemini 3 AI model, released recently, received widespread industry praise, boosting confidence in the company’s competitiveness amid technological upheaval. Earlier this week, Loop Capital upgraded Alphabet’s stock to buy, and legendary investor Warren Buffett’s Berkshire Hathaway built a position in the stock during Q3, reflecting market optimism about its future prospects.

Political Shifts: Trump Pressures Fed to Cut Rates, Sparks Attention

US President Donald Trump recently made remarks at the US-Saudi investment forum, implying that if Treasury Secretary Janet Yellen cannot push interest rates down, he will replace her, despite the fact that monetary policy is actually controlled by the Fed. Trump criticized high interest rates and expressed dissatisfaction with Fed Chair Jerome Powell. He claimed he would like to fire Powell and mocked his expenses on renovations at the Fed headquarters.

However, Yellen has previously advised Trump against directly replacing Powell, warning that such a move could impact market confidence and weaken investors’ trust in the Fed’s independence. Trump’s comments highlight the political pressure facing the White House—an increasing number of voters demand lower living costs, motivating the government to push for lower interest rates.

Goldman Sachs President John Waldron stated in an interview that the market’s gains this year are substantial, and the current correction is healthy, with further declines expected. He also pointed out that the market is overly focused on AI prospects, but whether capital returns will meet expectations and whether these returns are already reflected in stock prices remains uncertain.