Markets Navigate Cooling Labor Trends and Shifting Tech Momentum

Matthew Rubin Chief Investment Officer

 

1. NVIDIA beat revenue and earnings expectations and issued an upbeat forecast, though growth continues to cool from prior triple-digit levels.
2. Hiring improved more than expected in September, but rising unemployment and softer demand point to a cooling labor market.
3. Diverging views among Fed officials and limited recent data have reduced certainty around a December rate cut.

 

1. Strong NVIDIA Earnings Boost Outlook Despite Slower Growth Pace

Last week, NVIDIA released third-quarter results that surpassed expectations for both revenue and earnings. Sales reached roughly $57 billion, up more than 60% from a year earlier and above estimates near $55 billion.¹ Earnings per share also exceeded projections at about $1.30.¹ The company expects revenue of around $65 billion this quarter, exceeding some forecasts, and continuing to report robust forward demand for advanced AI chips, with some bookings potentially extending into 2026.¹

The strong results initially supported the stock and broader markets. However, shares later lost momentum as investors reassessed growth trends.² While sales gains remain robust, they have slowed from the extremely rapid expansion seen in prior periods when revenue growth exceeded 200%.² This shift reflects a transition from hyper-growth to still elevated yet more sustainable levels.

2. Labor Market Shows Mixed Signals

Last week’s delayed September employment report offered a mixed picture of the U.S. labor market. Total job gains came in stronger than expected at 119,000, suggesting hiring has not stalled.³ Yet the unemployment rate rose to 4.4%, its highest level in nearly four years, as more people entered the labor force and existing job seekers had a harder time finding positions.³ With job openings and hiring rates declining, employers appear to be easing demand for labor, even as the pool of available workers expands. Taken together, these forces point to a gradual cooling rather than an abrupt slowdown in the labor market.

Wage growth held steady at about 3.8% year over year, still above the roughly 3% inflation rate.³ With real wages remaining positive, household purchasing power continues to hold up, which helps support consumer spending.

3. Market Expectation Shift with Fed Conflicted on Further Rate Cuts

Last week, investors reassessed expectations for a rate cut at the Federal Reserve’s December meeting. Minutes from the most recent policy meeting showed that officials held differing views on the prior rate reduction, highlighting a lack of consensus on the path forward. The delayed September employment report also pointed to a labor market that may be stabilizing, reducing pressure for policymakers to act quickly.¹

The data backdrop remains thin. The government confirmed that no October jobs report will be issued, and the November release has been pushed to December 16th.¹ With the next Fed meeting scheduled for December 10th, officials will have limited new information at their disposal. As a result, market odds for a December rate cut have declined sharply, from about 70% at the start of the month to roughly 35% after the employment report’s release.²

Later in the week, remarks from the New York Federal Reserve indicated that another cut this year remains possible. Those comments helped push expectations back up, moving implied odds closer to 60%.² Looking ahead, rates appear likely to trend lower through 2026, which could provide support for economic growth and financial markets even if short-term uncertainty persists.

For the period ending 11/21/25.
* Small-cap stocks are represented by the Russell 2000^® Index. International stocks are represented by the MSCI EAFE. Bonds are represented by the Bloomberg US Aggregate Bond Index. Oil is represented by WTI Oil (West Texas Intermediate Oil), a benchmark for light, sweet crude oil and a primary measure for pricing oil contracts and futures in the U.S.

Sources
¹ Bloomberg
² FactSet
³ Bureau of Labor Statistics

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