US stocks staged a dramatic reversal, with investors questioning the driving force behind the year-end rally.
TL;DR
US stocks reversed gains despite strong Nvidia earnings and a robust jobs report, as AI profit concerns and crypto declines fueled investor doubts about the year-end rally's sustainability.
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According to ChainCatcher, Nvidia (NVDA.O) released strong earnings results and a jobs report confirming the continued strength of the economic fundamentals, but the optimism in US stocks failed to hold. Traders pointed out that renewed concerns surrounding AI revenue and profits, along with the drop in cryptocurrencies to their lowest level since April, also impacted the stock market. Chris Murphy, co-head of derivatives strategy at Susquehanna International, stated that investors are beginning to question the driving factors behind the year-end rally, and CTA positions remain vulnerable, potentially triggering automatic liquidation mechanisms in quantitative funds, leading to additional selling.