Future Challenges and Opportunities of Financial Markets
The consensus points to a possible correction: while there is optimism about upcoming rate cuts, valuations remain demanding and rising inflation could hurt fixed-income markets. Market breadth has fallen to worrying levels, and episodes of volatility may emerge in the coming weeks.
How NFP Data Impacted Each Index This Week
Impact on the S&P 500
- The S&P 500 slipped 0.12% after the NFP release, trimming earlier gains.
- Industrials and services showed weakness due to the unfavorable labor report.
- The reaction was mixed: economic concerns limited the upside from rate cut expectations.
Impact on the Nasdaq
- The Nasdaq 100 gained 0.25% after the NFP, boosting tech stocks.
- Broadcom (+14%) and Tesla (+3.3%) led the gains on increased expectations of Fed liquidity.
- Tech and high-growth companies clearly benefited.
Expectations and Reactions
- The weak jobs report reinforced a probability above 87% for a Federal Reserve rate cut.
- At least three cuts are expected in 2025, and the prolonged cheap money environment fueled the Nasdaq more than the S&P 500.
| Index | Reaction After NFP (%) | Favored Sectors | Outlook |
|---|---|---|---|
| S&P 500 | -0.12% | Industrials, moderate consumer | Mixed |
| Nasdaq | +0.25% | Tech and high-growth | Positive |
Nasdaq 100 Companies with Highest Post-NFP Volatility
Top Stocks Showing High Volatility
- Broadcom: +14% on AI contract.
- Lululemon: -18% due to weak earnings and revised guidance.
- Tesla: +3.3% on rate cut expectations.
- Micron: +3% in a favorable semiconductor environment.
- Marvell: -20%/+0.9% on forecast revisions and partial rebound.
- Nvidia: -2.4% chip sector volatility.
| Company | Change (%) | Main Driver |
|---|---|---|
| Broadcom | +14% | AI contract, solid results |
| Lululemon | -18% | Weak results, revised guidance |
| Tesla | +3.3% | Rate cut expectations, favorable environment |
| Micron | +3% | Positive semiconductor outlook |
| Marvell | -20%/+0.9% | Disappointing forecasts, partial recovery |
| Nvidia | -2.4% | Chip sector volatility, earnings pressure |
Observations
The swings were amplified by labor market weakness and rate cut expectations, which benefited tech stocks while punishing companies with weaker-than-expected results such as Lululemon.
