AI-driven market nervousness is palpable, with recent news flow providing ample fodder for bears.

A quasi-certain Fed rate cut in December, the end of the QT program and a rebound in sentiment toward credit and EM Debt lifted bond markets last week

Meanwhile, Big Tech carries the S&P 500. Each week, the Syz investment team takes you through the last seven days in seven charts.

U.S. stock indexes finished the holiday-shortened week higher, boosted by dovish comments from some Fed officials and several weaker-than-expected economic reports that seemed to reinforce the idea that a December rate cut remains on track. Small-cap stocks outperformed their large-cap peers, as the Russell 2000 Index advanced 5.5%. The Nasdaq Composite also posted strong returns, rebounding from the prior week’s sell-off as concerns regarding elevated valuations and spending on AI appeared to take a back seat to optimism around the growth potential from the technology. In economic news, U.S. retail sales increased by 0.2% in September (below +0.4% estimates). September PPI rose 0.3% in September, in line with estimates.

A repricing of Fed rate cut odds pushes USD yields lower, while credit spreads widen

AI-driven market nervousness is palpable, with recent news flow providing ample fodder for bears.

Nvidia posts exceptional earnings, yet a dramatic Thursday sell-off raises questions: do investors still fear an AI bubble?

Despite some good news during the week from both corporate earnings reports and government economic data, U.S. equity markets finished the week lower. The sell-off appeared to be driven by worries about lofty stock valuations and concerns around whether AI will generate enough profits to justify the massive spending that companies have poured into supporting the developing technology. The Nasdaq Composite had the largest losses, while the Russell 2000 held up better but still lost ground. The S&P 500 Index finished about 4.4% lower than the record high it achieved in late October. A rebound on Friday helped ease the losses that the major benchmarks suffered earlier in the week.

AI-driven market nervousness is palpable, with recent news flow providing ample fodder for bears.

Doubts on a Fed December rate cut and concerns on the debt-fueled AI capex cycle drive rates higher and credit spreads wider