Weak Nonfarm Payrolls Dampen Rate-Hike Bets: Nvidia Hits Intraday Record High, Tesla Deliveries Beat Expectations, France-Germany Spread Highest Since Euro Debt Crisis

Weak Nonfarm Payrolls Dampen Rate-Hike Bets: Nvidia Hits Intraday Record High, Tesla Deliveries Beat Expectations

Macro: September Nonfarm Payrolls Far Below Expectations, G7 Releases Oil Reserves

US nonfarm payrolls rose by 29,000 in September, far below Wall Street's expectation of 90,000, while the unemployment rate edged up to 4.2%. Institutions exclaimed that the September nonfarm payrolls “killed” October rate-hike expectations, and the market expects the probability of a rate hike to fall to 20%; the “new Fed whisperer” said the jobs report did not change the Fed's stance and that September CPI is more important. White House economic adviser Hassett, meanwhile, said the nonfarm payrolls report was “in line with expectations,” Hormuz has opened, and Trump is serious about the deficit issue ^[6].

On energy, the G7 decided to release 100 million barrels of emergency oil reserves, acting immediately and lasting for four months, with large-scale diesel releases in the first 20 days; the G7 oil reserve release plan hammered crude, with US crude falling more than 5% intraday ^[6]. Other reports said the US-Iran conflict disrupted OPEC+ production expansion pace, delaying the capacity review to mid-November ^[6].

US Stocks: Tech Stocks Support Market, Nvidia Hits Intraday Record High

Surprisingly weak US nonfarm payrolls data hurt October rate-hike expectations, while tech stocks supported US equities higher. The Nasdaq rose for a third straight day, hit an intraday record high, closed up more than 1%, and gained for a third straight week; the S&P and Dow rose for a second straight day but fell for the week. Specifically, the S&P 500 closed up 0.73% at 7,722.72 points, down 0.27% for the week; the Dow closed up 0.49% at 51,176.96 points, down 1.26% for the week; the Nasdaq closed up 1.19% at 27,190.864 points, up 0.45% for the week; the European STOXX 600 index closed up 0.75% at 631.35 points ^[6].

Nvidia hit an intraday record high for the first time in more than four months and closed up more than 1% ^[6]; specifically, on Friday it rose as much as about 3% intraday, refreshing its all-time intraday high, pared gains late in the session, and finally closed up 1.34%; its market cap briefly topped $5.7 trillion that day ^[4]. On the news front, according to The Information, Nvidia and SoftBank have each completed the final $10 billion investment in OpenAI's previous funding round, fulfilling their respective $30 billion investment commitments ^[4]. On Monday this week, Nvidia announced it would expand its share buyback authorization by $150 billion, the largest single buyback increase in history, bringing the total buyback program to $235 billion, and expects to complete it by fiscal 2028 ^[4]. In addition, Nvidia on Monday this week launched a new dual-layer AI safety system and introduced a 64GB version of DGX Spark, starting at $4,999, while the 128GB version's price increased to $6,950 ^[4][6].

As for Tesla, it delivered 486,532 vehicles globally in Q3, above analysts' average estimate of 463,761, but down about 2% from the record 497,099 in Q3 last year ^[3]. European new car registrations rose 53% year over year in August, and Model 3 sales in Canada climbed ^[6]. According to a report by DesRosiers Automotive Consultants, Tesla Model 3 sales in Canada performed strongly in Q3, with some models priced 25% lower in Canada than in the US; since May, nearly 16,000 electric vehicles have arrived in Canada from China ^[3]. As background, Securities Times reported in January that Canada granted Chinese electric vehicles an annual quota of 49,000 vehicles, with a 6.1% most-favored-nation tariff within the quota and no longer imposing the 100% surcharge ^[3]. Tesla closed up 4.65% on Friday but remains in negative territory year to date ^[3].

Euro Debt: France-Germany Spread Rises to Highest Since Euro Debt Crisis

French government bond spreads soared to their highest since the euro debt crisis. The France-Germany 10-year spread has risen to about 150 basis points, the highest since the 2012 euro debt crisis; France's 5-year credit default swaps (CDS) rose to about 87 basis points, the highest since early 2013; this widening occurred within one week, the fastest since 2011 ^[5]. The France-Germany 10-year spread widened to its largest since 2011 ^[6].

Markets are watching whether the European Central Bank will activate its Transmission Protection Instrument (TPI). Danske Bank chief strategist Piet Christiansen noted that given France's fiscal stance and political uncertainty, the spread widening is justified, which is also what leaves the market confused about the ECB's judgment ^[5]. Bundesbank President Joachim Nagel said: “My role on the Governing Council is to fulfill the mandate. Price stability is the core, and that has nothing to do with certain spread levels.” ECB President Lagarde said she did not see any signs of disorderly volatility or tension, and market functioning has not become disorderly ^[5].

Politics and Personnel: Powell Investigation Not Reopened, AI “Czar” Candidate Emerges

US Attorney General Todd Blanche said Friday: “We will not reopen the criminal investigation into him.” Earlier, the Federal Reserve Office of Inspector General released a report this week finding that Powell committed no criminal wrongdoing in the Fed building renovation project ^[1]. Blanche said he was satisfied with the report but noted that Powell's oversight of the project was “not appropriate,” and stressed that the Fed has planned to hire an independent auditor to review construction costs; once the audit finds any evidence of criminal wrongdoing, the Justice Department will step in to investigate ^[1]. Trump said in a social media post on Wednesday this week that, given the inspector general's findings, Powell should resign from his position as a Fed governor ^[1].

On AI governance, multiple media outlets learned that Trump is expected to appoint current Director of National Intelligence Jay Clayton as White House chief AI adviser, known as the “AI czar,” succeeding venture capitalist David Sacks, who left in March this year, with an announcement as soon as this Friday ^[2]. This appointment comes amid escalating AI safety controversy: a poll released this week by Quinnipiac University showed that 72% of surveyed US voters opposed building new data centers in their communities, up further from 65% in March ^[2].

Hong Kong Stocks and Other Company News

In Hong Kong stocks, the Hang Seng Index closed down 2.6% at 23,972.29 points, its biggest drop since March 23; a physical AI high-flyer plunged nearly 50%; heavyweight tech internet stocks fell collectively; Seres surged as much as 15% intraday; A-shares were closed that day ^[6].

In other company news, reports said Broadcom teamed up with Blackstone to raise $60 billion to pave the way for computing power for AI companies such as Anthropic; Japanese media said Toshiba plans to spend 60 billion yen to expand HDD production and double capacity, while Seagate Technology closed down 10%; China's pharma BD scored another win as Abogen Biosciences and Novartis reached a $7.8 billion mRNA licensing agreement ^[6].