Week of 09/02-09/06 Stocks Erase Gains, NVDA Under Pressure

The stock market declined on Friday as investors digested the monthly jobs report data which is crucial on deciding the size of this month's expected interest rate cut. The U.S. economy added 142,000 jobs last month which is just behind the forecasted 165,000 jobs expected to be added. The labor market has shown signs of cooling on the month-over-month data, which indicates the economy may not be as healthy as previously thought. Tech stocks have been leading the market sentiment, with Nvidia having the biggest drawdown with a 15% decline this week. As the economy shows signs of stress, sky high valuations such as Nvidia's have been taking a toll. Investors worry that AI chip U.S. export restrictions, antitrust violations, and supply chain bottlenecks could cause a huge drawdown in the company's stock value. This could also present a buying opportunity in the company stock, as many still believe the future is going to be driven by Nvidia's technology.

How does the jobs report data affect the FED's interest rate cut decisions?

The jobs report data plays a crucial role in influencing decisions regarding interest rate cuts. Strong employment growth and a decrease in the unemployment rate could prompt a central bank to consider reducing interest rates to stimulate further economic activity. On the other hand, weak job creation or rising unemployment revealed in the jobs report may lead the central bank to opt for interest rate cuts to bolster the economy and stimulate job growth.