Nasdaq Hits Record After Soft Jobs Report… And The Fed’s Next Move After Jobs Report 10/2/26

CNBC's "Fast Money"

The episode covers a Nasdaq record high driven by semiconductor strength, particularly NVIDIA's run to all-time highs despite rising Treasury yields and a soft jobs report. Hosts and guests debate the

Key takeaways

• NVIDIA hit an intraday record and closed near all-time highs, pushing its market cap over $5.6 trillion while Morgan Stanley reinstated it as a top semi pick.
• Memory makers Seagate and Western Digital dropped double digits after reports of Toshiba planning to double hard drive capacity in the Philippines by FY27.

Main topics

• Semiconductor market leadership and NVIDIA's valuation
• Hard drive/memory supply dynamics and Toshiba capacity plans

Notable quotes

"Semis are up 16% in the moment the yields went through the roof and outperformed the S&P by that very same amount."

Conclusion

The episode provides traders with actionable perspectives on navigating rate-driven market rotations,

Transcript preview

Speaker 8 (0:00) AI is here, transforming how we work, live, and lead. And the women I talk to aren't waiting for the future, they're shaping it. I'm Julia Boorstin, Senior Media and Tech Correspondent at CNBC. This is CNBC Changemakers, where I talk with the female leaders transforming business as AI reshapes the world. Follow and listen to CNBC Changemakers, Women Leading in the Age of AI, wherever you get your podcasts. Speaker 2 (0:30) Live from the Nasdaq MarketSide in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. A new record for the Nasdaq. Semis powering the tech-heavy index to intraday highs. And the world's biggest chipmaker leading the charge. Is this a sign that it's all clear for the AI trade? We'll debate that in another rate reversal. Treasury yields rising even as a weak jobs report cut chances of a rate hike this month. What is behind the disconnect? What does it mean for the markets? Plus, Nike runs to its worst level in 13 years. Tesla revs up on Q3 delivery numbers in harvesting gains in Archer Daniels. The chart master is diving into the technicals of this ag giant to find out how to trade the stock right now. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Farneman, and Carter Worth. Speaker 1 (1:17) Yeah, Speaker 2 (1:17) that's it. Speaker 1 (1:18) That's it. That's Speaker 2 (1:18) all Speaker 1 (1:18) we need. Speaker 2 (1:21) Three great ones. We start off with that NVIDIA-led run to all-time highs. The chip giant jumping as much as 3 % today, hitting its first intraday record since May. Morgan Stanley reinstating the stock as its top pick in the semi-space. It closed the session with a market cap of over $5.6 trillion. That's about $770 billion more than the second biggest company in the world. NVIDIA's move helping the Nasdaq climb to a record, too. The tech-heavy index eking out its third week of gains in a row and is up 5%. of the last six weeks, but one group notably sitting out the semi-strength. Memory makers Seagate and Western Digital down double digits with WDC hitting its lowest level in nearly six months. So what should we make of this leadership in semiconductors and also the weakness in some of these HDD makers? Speaker 1 (2:09) Well, I think we've seen a lot of rotation within the semi-space all year. And so the fact that NVIDIA is going to all-time highs, there's a strong upgrade. There's some arguments that you've had reinforcement of their network, their infrastructure, and that also when you start seeing some return on investment by Meta, et cetera, I think it just has reinforced semis altogether. Semis is a group, just to be clear, and all we've talked about are rising rates over the last three weeks, and it's been a parabolic move. During that time, so almost, if you follow that period on the Treasury curve, I'll reverse it for you folks at home. When it started to do that. you started to see semiconductors also make that move. And I wouldn't say that there was a correlation. I would just say that the insensitivity, and I would just say that semis are up 16 % in the moment the yields went through the roof and outperformed the S &P by that very same amount. So I think it's a defensive place to be in a rising rate environment. I think NVIDIA, we could argue, is very, very cheap and one of the safest places to be. The hard drive disk makers, if you think that this is the ultimate commodity in this headline, and we were talking about this at our lunch. time call, Toshiba out there with a $60 billion investment. And to the extent that you would expect different parts of especially the tech world, this is right up Japan's alley in terms of what Japan's always done and been able to do, but also obviously other parts of Korea. We've talked about CXMT. So to the extent that there are parts of the memory trade that are really the most commoditized part and supply is common. But you can't tell me that in everything we're learning about even some of those older chips from NVIDIA that there really is a story of... value there and longevity. And I don't think you should be getting too far away from this trade. I think Semi is going to make an all-time high. Speaker 6 (3:47) So I've thought NVIDIA has been cheap for a long, long time, longer than I thought it would stay this cheap. But I mean, it's very nice. You know, hit an intraday high, closed at a new high, closing high, but still a little off of that. I still think it's cheap. There's not, you know, this is just a tiny little titration in how expensive it is or not. I agree with Tim. Not expensive, not expensive going forward. When you look at that Toshiba thing, just the hint, the hint of a change in the supply-demand dynamic and the pricing, when you've got margins like they have right now, which are extraordinary, those are so vulnerable to any change in supply-demand. So maybe this isn't it, but it gives you a sense of, wow, what could happen if there really were. Speaker 2 (4:29) Right, and how nervous investors are that things will, in fact, change when actually WDC and FTC, they both have long-term contracts. So in theory, they should be a little bit insulated. In Speaker 6 (4:39) theory, yes. Speaker 2 (4:40) Yes, to at least the price changes that could happen on a near-term basis. But Speaker 6 (4:45) it's for what about Speaker 2 (4:46) the Speaker 6 (4:46) contracts that aren't locked in and future contracts? Right, yeah. Speaker 3 (4:50) You know, it's interesting. The price action, of course, as is so often the case, is a testament to relative strength. If you think that all semis and all things sort of... AI-related and happy and exciting. Went from that March low up and up and up and up. Semi's doubled. The SOX index doubled. And everything crashed, 30 % to 50%. But then, since then, we've started to sort out. WC never has shown any life. Sandy's struggling, whereas others have gone on and made new highs. So after there was quite a bit of uniform behavior, right, where correlations are very high, now the correlations are breaking down, which is... A good thing, because when something's just being traded because it's a part of a theme and maybe it's not, that's not actually the right way to address a security. Is this security worthy of the money that I'm putting into it? And the market is starting to sort out that very thing within these high flyers. And so the point that WDC not performing, for instance, it was never bouncing all along, whereas SOX have been bouncing for the better part of four or five weeks. Speaker 2 (5:45) So if this is a rationalization, then do you agree with this move today in NVIDIA? Do you see a... Well, Nvidia Speaker 3 (5:51) is a different animal. It is a stock that was the leader that then became a 18 month laggard or thereabouts that only now is starting to show some life. I think it's defensive characteristics. Right. It didn't surge. Everything surged, didn't crash. There is crashing are a desirable thing right here. Well, Speaker 1 (6:09) what do you make of this move in semis? So, again, semis have kind of picked up and run again and again, relative strength. This is what you talk about all the time. So just seems to me relative not only to the cues. But to the S &P, and that looks like a lot of times. And Speaker 3 (6:22) to, well, to some extent, there's a trading off between, if you take three sort of aggregates, MAGs, SOX or semis, and then IGV. And there's this interplay between them at different times. All three are sort of performing now, and that's what perspective would take you to a new high. I think the real, most interesting thing today was that laggards also participated. So if you look at, we know we're at five and six week lows for the... KRE and for the BKX and for the IWM and for the mid cap index, things that have just shown no life at least stop going down. And that's a positive for those who need breath or want breath to be a part of the story. Speaker 2 (7:03) So are we going to interpret this move in semis? I mean, with the rising tenure in particular, this is all because the economy is great. I mean, semis are the ultimate cyclical trade, right? You point that out all the time, Tim. So maybe they're rising alongside rates for a reason. And maybe we're seeing this sort of stabilization of these bombed out parts of the market for a reason. I Speaker 1 (7:25) don't think rates are coming down anytime soon, but I do think rates are overdone to the upside for now. In other words, if I would be a buyer of treasury rates, so of the bonds, the rates coming down, and I would probably be a seller of credit. I think we're in a place where, but Carter's right. I mean, think about the rest of the market. So if you think that equities have completely ignored the move higher in rates, think again. You've actually had industrials underperform. Carter just talked about what's going on in the KRE. But retail, industrials, utilities, it's been a very, very difficult trade. And I think you just get to a place here where some of those trades were just overdone to the downside. This was a day when we heard that the labor market didn't go cold, but it cooled off. And I think that's fair. I think it's a case where the rest of the market needed a chance to catch it. breath. Speaker 6 (8:15) Just for this cyclical trade, I do think there's a lot. I mean, every trade is cyclical eventually, but we're in a, you know, this is a whole different class of animal, way bigger than, I think, you know, the dot-com valuations that are not dot-com-ish. It will be cyclical at some point, but I still think there is a lot left to run in here, maybe little cycles in between, but I do still think there is a Speaker 3 (8:39) meaningful move. To Tim's comment about the rates being overdone. I mean, here's something that we were just, you know, we're constantly looking in the office for what might be an outlier. Where's an opportunity? And so we said, you know, TLT is down eight sessions in a row. Let's go look at that. Well, in the 23 history of TLT, there are only seven other times, eight other times where it's had a consecutive move up or down eight in a row. They've all been up. This is the only time where it's been down eight sessions in a row. And the others were up. And guess what happens for the up? They mean revert. and this one presumptively down, and it's mean reverting. You get a little counter-turn. You just can't keep going. It's all about sequencing. That's what charts are. You're studying the sequence and say, what's likely here after this kind of move? And so, to your point, we've never had, in the 23-year history, eight sessions down and around. Now you're getting into stock traders' almanac kind of stuff. It's like, oh, because would you bet your farm on that? No. But when it's done it up, every time it's come in. This is just the opposite. I would play for mean reversion, which is, to your point, rates look a little overdone. Speaker 2 (9:40) I mean, TLT is basically an aggregate, right? It's a blend. And so does it line up with what the individual charts for the two-year yield and the 10-year yield show? Speaker 3 (9:49) Well, each are a little different. But, I mean, if you just look at the chart of the 10-year yield, it is far above trend, far above this 100-year average, and due for some countertrend. Speaker 1 (9:59) I think you take this all also into a week where and we had this great chat last night with Steve Leisman about and actually, Melissa, you brought this up. But the question is, are the Fed governors, is Fed chair? Assistant Chair Williams, is he out there speaking on behalf of Kevin Warsh or is he out there speaking against Kevin Warsh? But either way, I thought we had reinforcement here from other parts of the Fed, even though the Fed is no longer talking to us, that the Fed is not ready to go or they don't have to go in October. And again, that's that's translated also into Fed fund futures and where we think we're going on probabilities. But I think the Fed between the data this week and punctuated by today's payroll number, the fact