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:

• Home Furniture Retailer company RH (NYSE: RH) fell 2.8%. Is now the time to buy RH? Access our full analysis report here, it’s free for active Edge members.
• Auto Parts Retailer company Advance Auto Parts (NYSE: AAP) fell 3.1%. Is now the time to buy Advance Auto Parts? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Advance Auto Parts (AAP)

Advance Auto Parts’s shares are extremely volatile and have had 36 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 20 days ago when the stock dropped 7.6% on the news that several analysts cut their price targets on the stock following the company's third-quarter earnings report, raising concerns about its turnaround plan and future performance. 

Although the company reported a 3.0% increase in comparable store sales and a return to adjusted profitability, the news was overshadowed by analyst skepticism. DA Davidson and Morgan Stanley both lowered their price targets on Advance Auto Parts to $55. Analysts from UBS also expressed caution, maintaining a hold rating and citing worries about whether the positive trends could last given potential "consumer headwinds." Broader concerns also lingered, as the company had been dealing with deepening losses in previous years and faced costs tied to store closures, adding to uncertainty about its path to profitability.

Advance Auto Parts is flat since the beginning of the year, and at $48.40 per share, it is trading 27.2% below its 52-week high of $66.50 from July 2025. Investors who bought $1,000 worth of Advance Auto Parts’s shares 5 years ago would now be looking at an investment worth $335.31.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report.