Stocks bounce back and Nvidia turns positive after a single Fed speech sends cut probabilities surging from 39% to over 70%
MARKET INSIDER – U.S. stocks snapped back on Friday, breaking free from the previous day’s AI-driven selloff after New York Fed President John Williams signaled that another rate cut could arrive as soon as December. His comments instantly rewired market expectations and reversed early weakness in tech, offering a reprieve to investors rattled by Thursday’s violent intraday reversal.
The Dow rose 225 points (0.5%), the S&P 500 gained 0.4%, and the Nasdaq edged up 0.2%. Futures immediately reflected the shift: traders boosted the odds of a December quarter-point cut to over 70%, up from just 39% the day before, according to the CME FedWatch Tool.
Williams, speaking in Santiago, Chile, said monetary policy is now “modestly restrictive” and that he still sees “room for a further adjustment in the near term” to move rates closer to neutral. His words were enough to flip sentiment across the AI complex: Nvidia and AMD, both set for another brutal session, turned positive in premarket action as hopes grew that easier policy could support sky-high valuations and stabilize a slowing economy.
The rebound arrives after one of the sharpest market whiplashes of the year. On Thursday, the Dow surged more than 700 points following Nvidia’s blockbuster earnings—before the rally collapsed and all major indexes finished deep in the red on fears the Fed would hold rates steady. Even with Friday’s bounce, the damage is significant: the S&P 500 is down 2.4% for the week, the Dow is down 2.6%, and the Nasdaq has fallen 3.3%.
Some strategists argue that this pullback is healthy. “Things were getting a tad frothy,” said Carson Group’s Ryan Detrick. “Sentiment has swung to extreme fear, which is exactly what you want to shake out weak hands.”
Crypto markets weren’t spared. Bitcoin dropped 3% on Friday, deepening its weekly loss to more than 11% and falling to its lowest level since April as investors dial back risk across the board.
With the next Fed meeting just weeks away, all eyes now turn to incoming data—and to whether one speech from a senior policymaker truly marks a turning point, or just another head fake in an increasingly volatile market.
