Markets tumbled this week, with all three major indices sliding sharply. The last—and largest—of the Magnificent 7, Nvidia, reported very strong earnings Wednesday after the bell, beating both revenue and profit expectations. Stocks initially opened higher on the news, but sentiment reversed quickly after the September employment report. The U.S. economy added 119,000 jobs, more than double the forecast of 50,000, and initial jobless claims came in at 220,000, below expectations of 227,000. Together, these signals pointed to a firmer labor market, which in turn reduced expectations of a December rate cut. However, the report wasn’t entirely strong: the unemployment rate ticked up to 4.4%, the highest since October 2021. The mixed signals—strong hiring but rising unemployment—added to market volatility, as investors debated whether the Fed would feel comfortable easing policy next month. Concerns about stretched AI valuations further weighed on sentiment. Both the Dow and Nasdaq swung more than 1,000 points from their intraday highs to lows. This morning, the University of Michigan released its Consumer Sentiment Index, which fell to 51—the lowest reading since June 2022. Wage growth also cooled, with average hourly earnings rising 3.8% year over year, slightly above expectations of 3.7%. Adding to the uncertainty, New York Fed President John Williams said he believes the Fed can begin to lower interest rates “in the near term” given signs of labor-market weakness. His comments helped push December rate-cut odds back up to 75.3%, a sharp increase of roughly 30 percentage points from last Friday.