On Friday, the three major stock indices rose, and NVIDIA regained some of its earlier losses. Meanwhile, the U.S. inflation data for October was slightly lower than market expectations.

The Dow Jones rose by 0.36%, the S&P 500 index rose by 0.31%, and the Nasdaq index rose by 0.07%.

"Seven Sisters" group: Google rose by 1.32%, Apple by 1.10%, NVIDIA by 0.79%, Tesla by 0.69%, Meta Platforms by 0.45%, Amazon by 0.39%, and Microsoft fell by 1.05%.

In October, the U.S. Producer Price Index rose by 0.3% on a month-on-month basis. Initially, upon the release of this data, stock index futures soared, but subsequently the increase narrowed. Economists surveyed by Dow Jones had previously expected a month-on-month increase of 0.4%.

However, the report also shows that producer prices have risen by 6.5% year-on-year, marking the largest year-on-year increase since November 2022.

Chris Zaccarelli, Chief Investment Officer at Beiguang Asset Management, stated: "There are some signs of improvement in the PPI data this time, but inflation levels are still too high. Given that the CPI data has already exceeded the acceptable range for the Federal Reserve, this report is unlikely to change the Fed's policy stance in December. We expect the Fed to raise interest rates by 25 basis points in December." He also added that there is a possibility of an interest rate hike at the January meeting next year.

NVIDIA rose by 0.8%, reversing the decline of over 4% from the previous trading day. Previously, the founder of this chip giant, who was embroiled in a scandal and also holds the title of CEO Jensen Huang, announced his resignation, which put downward pressure on the stock price.

Affected by the announcement of Jensen Huang's resignation due to multiple scandals, the three major stock indices - the Dow Jones, S&P 500, and NASDAQ - all declined on Thursday. Previously, analysts had warned that Jensen Huang's departure could trigger a 20% pullback in NVIDIA's stock price.

Cohlette Kress, who has served as the Chief Financial Officer at NVIDIA for over a decade, has taken on a temporary CEO role. The company's board of directors is simultaneously seeking candidates for a permanent CEO position both internally and externally.

On Thursday, Trump stated, "We don't need to reach an agreement with Iran," a remark that exacerbated market concerns about a further escalation of tensions between the United States and Iran. Oil prices soared, and the stock market also came under pressure.

On Friday, oil prices remained relatively stable, with the price of WTI crude oil futures above $88 per barrel, and Brent crude oil above $96 per barrel.

Despite the recent sharp market fluctuations, the major U.S. stock indices are still expected to close higher this week. The Nasdaq index has risen by 3.2% so far this week, the S&P 500 index is expected to gain about 2.9%, and the Dow Jones index is set to see a gain of nearly 2%. The three indices are poised to record their best single-week performance since early August.

NVIDIA will release its financial report next week.

Jon Zauderer, an expert in technology, media, and telecommunications at Citigroup and the head of its professional sales business, stated that competitors to NVIDIA such as AMD, Arista, and Broadcom could benefit from this controversy.

Tim Scott, the chairman of the Senate Banking Committee in the United States ( Tim Scott ), sent letters on Thursday to Secretary of Commerce Howard Lutnick ( Howard Lutnick ) and Jensen Huang, requesting that both attend a congressional hearing and testify regarding recent developments at NVIDIA.

Next week, NVIDIA's upcoming financial report, as well as the initial public offering (IPO) of Anthropic PBC, will be two important events that will test the market's confidence in the current boom in artificial intelligence investments. In addition, CoreWeave Inc plans to raise at least $4 billion by issuing investment-grade loans.

According to CME's FedWatch tool, investors currently believe that the probability of the Federal Reserve raising interest rates by 50 basis points significantly in December is 13%, whereas a week ago this probability was zero.

Capital Group Director of Fixed Income Investments Manusha Samaraweera stated: "Currently, the market has actually factored in the expectation that the Federal Reserve will raise interest rates three times over the next 12 months. The recently released CPI data is clearly slightly higher than expected. If similar inflation data continues to emerge, then it is entirely possible for the Federal Reserve to raise interest rates three more times. This is definitely a scenario that could happen."

Market expectations for the Fed's policy outlook are increasingly leaning towards a hawkish stance, which in turn is driving the US dollar stronger. The dollar is expected to rise by 0.9% this week, marking the largest single-week increase in over a month.

Meanwhile, traders are closely monitoring the trend of the Japanese yen. The exchange rate of the yen against the US dollar has fallen below the key level of 160 for the first time since September, reigniting market expectations that Japanese authorities may intervene in the foreign exchange market.

The New York Fed stated on Thursday that as part of this summer's joint intervention in the foreign exchange market by the United States and Japan, the bank purchased 79.4 billion yen (approximately $497.37 million) in the spot market on July 31, while selling euros through the Foreign Exchange Stability Fund to support the Japanese yen exchange rate.

Bank of Nassau The chief economist of 1982, Win Thin, stated: "Whenever the exchange rate between the US dollar and the Japanese yen approaches 160, the market becomes nervous about potential foreign exchange interventions."

In other markets, pressured by concerns about inflation and expectations of rising interest rates, the cryptocurrency market faced challenges, with Bitcoin falling below $70,000 for the first time since August.

In addition, after experiencing selling pressure for three consecutive trading days, gold found some support and rebounded.

Just as global bond investors began to believe that the worst phase of this year's selling spree had passed, the surge in U.S. Treasury yields has forced them to re-evaluate that judgment. The multiple factors stirring the world's largest bond market show little sign of abating: stubborn inflation and the hawkish rhetoric from the Federal Reserve have prepared traders for more aggressive interest rate hikes, while the increasing supply of debt has further pushed up the upward pressure on yields.

Even though the turmoil caused by NVIDIA has disrupted the stock market and risk sentiment, the selling pressure in the bond market has not ceased, which has dampened expectations that U.S. Treasuries have once again regained their traditional role as a safe-haven asset. This represents a sharp reversal from just a week ago, when Democrats achieved a major victory in the U.S. midterms, and concerns regarding artificial intelligence ( AI ) prompted investors to flock to U.S. Treasuries as a safe haven.

A team of strategists from Goldman Sachs, led by Peter Oppenheimer, stated in a report to clients that they expect the S&P 500 index to rise to 8,700 points over the next 12 months, despite anticipating a significant slowdown in the growth rate of earnings for this benchmark index. Since 2026, the S&P 500 index has risen by 11%.

At the time Goldman Sachs made this judgment, the Nasdaq 100 index had fallen by 9% from its peak at the beginning of October. Concerns over the infrastructure construction driven by artificial intelligence ( AI ), as well as governance issues at NVIDIA, dragged down the index.

Strategists said that this round of decline has caused the stock valuation of the so-called hyperscalers in cloud services ( Hyperscalers ) to be “well below” historical levels.

Strategists wrote: 'We believe that the technology sector, especially the ultra-large cloud service providers, is relatively defensive. It is true that the largest companies have shifted to a net outflow of cash flow, but overall balance sheet indicators such as net debt-to-equity remain healthy.'

Responsible Editor: Guo Mingyu