US equities fell for the week despite strong earnings and mixed but generally supportive economic data. Valuation concerns and renewed doubts about AI profitability drove broad weakness, with the Nasdaq underperforming. NVIDIA reported record revenue and a stronger outlook, but its shares reversed early gains and ended lower, reinforcing caution toward AI-linked names. Walmart beat expectations and raised guidance. September’s long-delayed jobs report showed payrolls rising 119,000, while unemployment ticked up to 4.4%. Treasury yields declined, supporting prices; municipals lagged due to heavy supply, and high yield softened with equities.
Attention centered on the upcoming December 9–10 Federal Reserve meeting. While October minutes reflected hesitation about another near-term cut, comments from New York Fed President John Williams boosted easing expectations. Futures markets implied nearly a 75% probability of a December rate cut, up from 44% a week earlier. Investment-grade corporates produced positive returns but modestly trailed Treasuries.
European markets declined as concerns over AI valuations and shifting US rate expectations weighed on sentiment. The STOXX Europe 600 fell 2.2%, with major indexes across France, Italy, Germany, and the UK also lower. Eurozone PMIs signaled steady expansion driven by services, while manufacturing softened slightly. Consumer confidence held at an eight-month high of -14.2.
