What Happened?
A number of stocks fell in the afternoon session after markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts.
While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%. This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment.
Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Financial Technology company Robinhood (NASDAQ: HOOD) fell 9.1%. Is now the time to buy Robinhood? Access our full analysis report here, it’s free for active Edge members.
- Consumer Subscription company Chegg (NYSE: CHGG) fell 8%. Is now the time to buy Chegg? Access our full analysis report here, it’s free for active Edge members.
- Financial Technology company Coinbase (NASDAQ: COIN) fell 6.2%. Is now the time to buy Coinbase? Access our full analysis report here, it’s free for active Edge members.
- Online Marketplace company MercadoLibre (NASDAQ: MELI) fell 7.4%. Is now the time to buy MercadoLibre? Access our full analysis report here, it’s free for active Edge members.
- Online Marketplace company Sea (NYSE: SE) fell 8.4%. Is now the time to buy Sea? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Robinhood (HOOD)
Robinhood’s shares are extremely volatile and have had 59 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 3.1% on the news that the company entered a partnership with delivery startup Gopuff to offer cash delivery to its users. The collaboration allowed customers to withdraw cash from their brokerage accounts and have it delivered to their doorstep. The new service launched in New York with plans to expand to other major cities, including San Francisco and Philadelphia. This move aligned with Robinhood's effort to become a more comprehensive financial platform for its clients.
Robinhood is up 166% since the beginning of the year, but at $104.85 per share, it is still trading 31.2% below its 52-week high of $152.46 from October 2025. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $3,011.
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