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Stocks Get AI Boost as Bonds Rise After Jobs Data
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November 20, 2025
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Marta Norton, Chief Investment Strategist at Empower, discusses Nvidia’s results and their impact on AI demand and market stability.
The rally in stocks powered ahead as optimism over the artificial-intelligence technology that has fueled the bull market outweighed doubts over whether the Federal Reserve will cut rates in December.
A tech surge led equities higher, with the Nasdaq 100 up about 2% as Nvidia Corp. delivered a solid outlook and pushed back on the idea the AI industry is in a bubble. Those prospects overshadowed questions about the Fed’s ability to keep easing policy, with a mixed — and stale — jobs report being the only official major labor data to be released before their meeting.
To be fair, bond traders slightly boosted the odds that policymakers will reduce borrowing costs for a third straight time. Money markets implied a nearly 35% chance of rate cut, up from around 20% before Thursday’s data. Treasury two-year yields slid three basis points to 3.56%. The dollar wavered.
US job growth picked up in September following a decline in the prior month, and the unemployment rate rose to an almost four-year high of 4.4%, underscoring a number of cross-currents in a fragile labor market. Nonfarm payrolls increased 119,000 after the prior month was revised lower.
Despite the fact that the September jobs report is very backward looking, equities and bonds seem to be picking the parts of the jobs release they like, according to Seema Shah at Principal Asset Management.
“Equities like the fact that payrolls were stronger than expected, suggesting the economy is still on a firm footing, while the bond market likes the rise in unemployment and slowdown in wage growth which may keep the case for a December Fed cut just about alive,” she said.
Overall though, in the face of so much Fed hawkishness and without any further jobs reports ahead of the December meeting, today’s jobs release is unlikely to tip the balance to a December cut, Shah concluded.
“For as much focus as this jobs report garnered this morning, it’s being overshadowed by Nvidia’s blowout earnings results,” said Bret Kenwell at eToro. “If this stock can regain a leadership role over the next few days and weeks, it has the potential to not only reignite the AI trade, but give the entire market a lift.”
The S&P 500 climbed 1.6%. A gauge of tech megacaps jumped 2.8%. Nvidia rallied 3.2%. Walmart Inc. raised its full-year sales and profit outlook. Wall Street’s closely watched gauge of stock volatility — the VIX — dropped below the 20 level associated with periods of stress.
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