Nvidia authorized an additional $150 billion in share buybacks and Micron posted a blowout quarter last week, while a soft jobs report raised the odds of a Federal Reserve rate hold. The Nasdaq notched a weekly gain even as the Dow and S&P 500 finished lower.
A soft jobs report lifts stocks
September's nonfarm payrolls report showed the U.S. economy added 29,000 jobs last month, with unemployment rising to 4.2%. That came in well below the Dow Jones consensus of 84,000 jobs and a 4.1% unemployment rate.
The weak print, paired with a cooler-than-expected August inflation reading, pushed traders to raise their bets on a Federal Reserve rate hold. Markets are now pricing a 78% likelihood of a hold at the late-October meeting, up from 36% a week earlier, according to the CME FedWatch Tool. The Dow still posted a weekly loss of 1.26%, and the S&P 500 slipped 0.3%, while the Nasdaq managed to gain 0.45% on AI-driven demand.
Micron's outlook overshadows near-term weakness
Micron delivered revenue that surged 379% from a year ago to $54.23 billion, with adjusted earnings of $33.42 per share beating expectations. The company guided for $61.5 billion in revenue and $38.15 in adjusted EPS for its fiscal first quarter of 2027, both ahead of Wall Street estimates.
Still, shares ended the week down 0.7% as investors weighed plans to add manufacturing capacity that could eventually pressure memory prices. Micron said roughly 75% of its expected 2027 output is already spoken for, and it has signed 26 strategic customer agreements, up from 16 last quarter. Jim Cramer called the outlook for the next couple of years "the best that I've ever heard."
Nvidia authorizes a bigger buyback
Nvidia authorized an additional $150 billion in share repurchases, bringing its remaining authorization to $235 billion. Wall Street expects the chipmaker to generate roughly $440 billion in free cash flow over the next six quarters, giving it room to keep buying back stock while funding its AI investments.
Shares are up roughly 24% this year, yet the stock has lagged other names in the iShares Semiconductor ETF even as adjusted earnings per share more than doubled in back-to-back quarters. Nvidia finished the week up 3.95% and topped its May intraday high on Friday, though it failed to close at a record.
Source: CNBC
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