JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Nvidia, Micron lead tech recovery
- Jobs report comes in better than expected
- Moderna handily outpaces Wall Street’s quarterly estimates
Phew! A trading week marked by three straight sessions of whiplash and two of heightened volatility is over, ending with a technology rebound that could still be tested.
Chipmaker and semiconductor stocks led what might be described as a fairly impressive recovery after Thursday’s bruising selloff. The Nasdaq Composite rose by 1.09%, regaining some of the 5.5% it lost Thursday, but it is still in correction territory. The S&P 500 Index climbed 0.32% while the Dow Jones Industrial Average settled off 0.46% after spending much of the session on the flat line.
It’s still unclear whether today’s comeback is part of a broader relief rally or the onset of a reset. That could be what’s driving the Cboe Volatility Index® (VIX® Index) to stay above 20. At the close, the VIX® Index was down 9% to 25.56. That’s not the same level of concern we saw yesterday, but it’s still elevated – the Middle East situation hasn’t gone away and several other economic fears are looming, including a new inflation worry linked with a robust jobs situation. Monday’s trading, after a weekend off, might offer insight into whether today’s bounce has follow through.
Traders buying the dip may have helped boost the tech sector after many types of stocks tied to artificial intelligence (AI) were badly thrashed Thursday. Nvidia, Micron, Intel, SanDisk, Marvell and SK Hynix all moved up with high single-digit gains. Advanced Micro Devices (AMD) clawed back 11% of the 17% it lost Thursday.
Those pulling down the Dow included Apple, down 0.52%; Microsoft, off 1%; Home Depot, down 1.9%; and Salesforce, down 3.9%.
On the inflation worry mentioned above, the Labor Department surprised the market again, this time with October’s better-than-expected jobs report that added 165,000 jobs and lowered the unemployment rate to 4.1%. The number was well ahead of the 55,000 new jobs economists were anticipating. The report also raised September’s unexpectedly soft numbers by 84,000 jobs, relieving some concerns about a softening job market.
Such strong economic fundamentals might now give the Federal Reserve more ammunition to raise interest rates to cool the inflation rate, which stands at 3.7%. There’s still plenty of time, and more data to come, before the Fed’s Dec. 8-9 meeting, including Tuesday’s Consumer Price Index (CPI) report and another jobs report. The CME’s FedWatch tool moved to a 79.1% probability that the Fed will raise rates by 25 basis points, up from Thursday’s drop to 66.9%.
As we’ve previously noted, some capital has rotated out of tech stocks toward more defensive sectors, such as healthcare. Moderna’s earnings report may be one reason. The biotech company blasted through Wall Street’s sales and profit expectations, with revenues up 29%. The maker of mRNA medicines and vaccines also boosted its 2026 sales growth guidance to 15% to 25%, up from an earlier 10%.
In options action today, the price of Moderna’s calls were up 10%, with buyers on the 280 line that expires Friday. Moderna shares closed 5.3% higher to $254.19.
Intel call options were also active on the 60-strike calls expiring Friday. Intel shares closed at $56.28, up 7.7%.
Happy Trading!
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