What key signals did the US "sleepless night" reveal to the market?

Original author: 1912212.eth, Foresight News

On November 19th, the US stock and cryptocurrency markets were completely sleepless, as Nvidia, the first AI company to go public, was about to release its earnings report, the performance of which would greatly influence subsequent market fluctuations. The Nasdaq once fell to 22,231, the S&P 500 fell to 6,574, and Bitcoin, from around 4:00 AM on November 19th, plummeted from $93,000 to a low of around $88,600.

Fortunately, Nvidia's financial report brought good news to the market.

Nvidia's Q3 revenue reached $57 billion, exceeding expectations.

As the "shovel seller" of the AI era, Nvidia not only supports half of the Nasdaq but has also become a bellwether for global risk assets. Data shows that over the past six months, the correlation between Bitcoin and the Nasdaq 100 Index (NDX) has remained high. And the Nasdaq's rise and fall largely depends on Nvidia's performance.

On November 20th, Beijing time, Nvidia released its Q3 financial report (August-October calendar year), with revenue of $57.01 billion, exceeding the expected $55.19 billion; adjusted EPS of $1.30, exceeding the expected $1.26; and data center revenue of $51.2 billion, a year-on-year increase of 62%.

With its performance remaining unbeatable, NVDA once rose to $187.

In the earnings call, Nvidia CEO Jensen Huang stated that the company's latest generation of Blackwell architecture chips "sold far beyond expectations, and cloud GPUs are sold out." He added that "computing demand for training and inference continues to accelerate exponentially. We have entered a virtuous cycle in AI." During the earnings call, he again refuted the AI bubble theory, saying that there are many claims about an AI bubble, "but from our perspective, it's completely different."

Nvidia's earnings report provided some reassurance to the US stock market, halting its downward trend and triggering a rebound in the crypto market. BTC has now recovered and is fluctuating around $92,000.

Internal divisions within the Federal Reserve leave a December rate cut uncertain.

The minutes of the October FOMC meeting released yesterday revealed a rare division within the Federal Reserve regarding whether to continue cutting interest rates in December. Hawkish members explicitly stated that the market is "more data-dependent" and expressed concern about the risk of a rebound in inflation; doves, on the other hand, emphasized that the labor market is cooling rapidly and that a "precautionary rate cut" is needed.

The current target range for the federal funds rate is 3.75%–4.00%, the level following the second 25bp rate cut this year in 2025. However, a statement in the minutes that "a number of participants noted that it might be appropriate to pause" completely surprised the market.

The latest data from the CME FedWatch tool shows that the probability of a 25 basis point rate cut in December has plummeted from 95% two weeks ago to 28%. The latest data from Polymarket shows that the market's bet on a 25 basis point rate cut by the Federal Reserve in December has fallen to 30%, while the probability of no rate cut has risen to 67%.

Now that expectations for interest rate cuts have been halved, the shadow of tightening liquidity has once again loomed, putting pressure on the prices of risky assets.

To make matters worse, the US November non-farm payroll report has been officially postponed to December 16 – this is because the expiration of government funding has hampered the work of the BLS (Bureau of Labor Statistics). The October non-farm payroll data was already significantly revised downward due to factors such as hurricanes, and the September data was also delayed. Now, the November data will have to wait almost another month.

The market has completely lost its most crucial anchor.

Goldman Sachs' latest forecast suggests that November's non-farm payrolls will likely increase by only 50,000 to 80,000 jobs, far below the previous figure of 220,000, and the unemployment rate may rebound to 4.3%. If the data is indeed very weak, the Fed's hawks will gain a decisive advantage, and the rate-cutting cycle may be paused directly in the first quarter of 2026. Conversely, if the data is unexpectedly strong, it will further strengthen the expectation of "no rate cuts."

Trump attacks Powell; new Fed appointee may be announced before December 25.

Less than two hours after NVIDIA released its financial report, Trump directly attacked Powell in an interview, saying, "I would love to fire him (Powell)," and calling him "extremely incompetent."

At the U.S.-Saudi Investment Forum in Washington, D.C., Trump urged Treasury Secretary Bessant to expedite the search for a successor to Powell. Trump told Bessant, who was sitting in the audience, "You'd better work harder, Bessant. The only thing Bessant messed up was the Federal Reserve."

Powell's term as Federal Reserve Chairman expires next May, while his term as a Federal Reserve Governor runs until 2028. Trump also jokingly pressured Bessant.

Interest rates are too high, Bessant. If you don't fix this soon, I'm firing you.

He stated that Bessant had been privately urging him not to fire Powell, while Commerce Secretary Lutnick was "more inclined" to fire Powell.

Bessant, who is leading the search for a new Federal Reserve chair, recently stated that Trump will meet with the three final candidates after Thanksgiving on November 27th, and the new candidate may be announced before Christmas on December 25th. According to Polymarket data, the market is currently betting on Kevin Hassett to be the most likely candidate.