Nvidia’s Strong Results Fail to Reignite Risk Appetite
November 24, 2025
Financial Markets
Markets were decisively in risk-off mode last week, continuing the defensive rotation and momentum unwind that has characterized trading over the past several weeks. Major equity indexes declined, with sentiment shifting sharply following Nvidia’s earnings report on Wednesday and the delayed September payrolls report released on Thursday.
The market initially reacted positively to Nvidia’s results—the company beat revenue expectations by roughly $2 billion and provided guidance for next quarter that was nearly $3 billion above consensus. Enthusiasm quickly faded as investors’ concerns about valuation caused a rotation out of Big Tech, semiconductors, and other AI-linked names. Nvidia was unable to sustain post-earnings gains, and by mid-morning Thursday, the broader market had turned lower. The selling appeared less about fundamentals and more about stretched valuations and technical exhaustion, with investors reassessing whether AI enthusiasm alone can justify elevated growth-stock multiples.
Sector leadership was notably defensive. Healthcare, Consumer Staples, and Communication Services led performance, while Information Technology, Consumer Discretionary, and Energy lagged. The rotation into defensives underscores an investor preference for stability amid uncertainty surrounding the Federal Reserve’s next steps and growing questions about the durability of the AI trade.
| Index | Prior Week | Year-to-Date | 1-Year |
|---|---|---|---|
| S&P 500 | -1.91% | 13.56% | 12.44% |
| S&P 500 Equal Weighted | -0.85% | 7.62% | 2.76% |
| Dow Jones Industrial Avg. | -1.85% | 10.35% | 7.22% |
| NASDAQ Composite | -2.71% | 16.01% | 18.17% |
Economics
After several weeks of limited visibility due to the government shutdown, economic data releases have begun to resume, most notably Thursday’s September nonfarm payrolls report.
The results exceeded expectations but revealed mixed signals beneath the surface. Payrolls rose by 119,000, above the consensus forecast of 50,000 and marking the strongest increase since April. However, August’s and July’s figures were revised lower by a combined 33,000 jobs, suggesting a softer growth than originally thought. The unemployment rate ticked up to 4.4%, the highest in four years, while wage growth slowed modestly. Continuing jobless claims also climbed to their highest level since late 2021, reinforcing signs of a cooling labor market.
After Thursday’s jobs data, markets were left struggling to interpret whether the report strengthens or complicates the Fed’s policy calculus. The October employment report will not be released due to the shutdown, meaning policymakers will head into the December 10th FOMC meeting with incomplete data. This gap is likely to intensify debate among Fed officials, with some viewing the rise in unemployment and downward revisions as justification for a rate cut, while others may emphasize the still-strong headline payroll figure and uncertainty amid incomplete data as reasons to hold rates steady.
With inflation at 3% and not making any recent progress towards the Fed’s 2% goal, Fed commentary underscores the policy divide taking shape within the Committee. New York Fed President John Williams remarked that policy may need to move closer to neutral in the near term, balancing inflation control against labor-market risks. Williams’ comments are especially noteworthy given his perception as a more hawkish FOMC member. In contrast, Boston Fed President Susan Collins and Dallas’s Lorie Logan expressed a preference to keep rates moderately restrictive for longer. The October FOMC minutes released this week added further nuance, showing “many” participants favored keeping rates unchanged through year-end, though “several” saw room for another cut in December as the economy continues to show signs of cooling.
Looking ahead, while the Fed’s December decision remains uncertain, the 2026 rotation of voting members may tilt the Committee toward a more dovish balance, setting the stage for additional easing next year.
Conclusion
Economic data are finally returning but remain incomplete. The September jobs report, while superficially strong, revealed subtle but important cracks in the labor story. Negative payroll revisions in particular cast doubt that the latest print could later be revised lower. As new data become available, markets may continue to experience outsized reactions to incremental surprises.
It’s worth noting that the S&P 500 is still only about 5% below its all-time high—a reminder that recent weakness remains modest, but valuations are well above long-term averages. While growth has cooled, the broader economic environment does not point to an imminent recession. Against this backdrop, market corrections of 5-10%, should be viewed as normal and healthy, particularly following the strong rally from the April tariff-induced lows.
I. Front End Disclosure
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of 1919 Investment Counsel, LLC (“1919”). This material contains statements of opinion and belief. Any views expressed herein are those of 1919 as of the date indicated, are based on information available to 1919 as of such date, and are subject to change, without notice, based on market and other conditions. There is no guarantee that the trends discussed herein will continue, or that forward-looking statements and forecasts will materialize.
Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all clients and each client should consider their ability to invest for the long term, especially during periods of downturn in the market. No representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those shown.
All investments carry a degree of risk and there is no guarantee that investment objectives will be achieved.
This material has not been reviewed or endorsed by regulatory agencies. Third party information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
There is no guarantee that employees named herein will remain employed by 1919 for the duration of any investment advisory services arrangement.
1919 Investment Counsel, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission. 1919 Investment Counsel, LLC, a subsidiary of Stifel Financial Corp., is a trademark in the United States. 1919 Investment Counsel, LLC, One South Street, Suite 2500, Baltimore, MD 21202. ©2025, 1919 Investment Counsel, LLC. MM-00002150
II. Investment Analysis
The information shown herein is for illustrative purposes. 1919 may consider additional factors not listed here or consider some, but not all, of the factors listed here as appropriate for the strategy’s objectives.
There is no guarantee that desired objectives will be achieved. 1919 has a reasonable belief that any third party information used for investment analyses purposes is reliable but does not represent to the complete accuracy of such information by any third party.
III. Portfolio Composition
For illustrative purposes. There is no guarantee that the portfolio composition for the strategy discussed herein will be comparable to the portfolio shown here.