By Beth McKenna
Publication Date: 2025-11-21 03:00:00
Two key reasons for Thursday’s market reversal were increased concern that the Federal Reserve would not cut interest rates in December and jitters about an AI bubble not fully extinguished by Nvidia’s earnings report.
Many investors in Nvidia (NVDA 3.17%) stock and other artificial intelligence (AI) stocks probably went to bed on Wednesday night believing that Thursday would be a good day for their stock. Indeed, many investors likely thought the same about the entire stock market.
That’s because AI tech leader Nvidia (NVDA 3.17%) turned in a phenomenal third-quarter report on Wednesday after the market close. Not surprisingly, investors bid the stock up by about 5.1% in Wednesday’s after-hours trading.
Nvidia’s quarterly results often impact other AI stocks as well. The company is considered a bellwether, or an indicator, of the AI market, because it’s the largest AI company by market capitalization. Its immense size stems mainly from its sales of graphics processing units (GPUs) and related tech that enable AI in data centers. Demand for its industry-leading GPUs has been voracious.
Moreover, Nvidia is the most valuable company on the S&P 500 index, which is why it’s often considered a bellwether for the entire U.S. stock market as well.
Image source: Getty Images.
Thursday’s early market rally turned into a rout
Following Nvidia’s stellar report, it was no surprise that its shares and the market in general opened higher on Thursday morning.
Nvidia shares were up 5.1%…
