(NEW YORK) -- Stocks rallied in early trading on Thursday, just hours after blockbuster earnings from chip giant Nvidia and a stronger-than-expected jobs report.
A stock market selloff over recent days underscored the uncertainty looming over the economy as some investors warned of an AI bubble. The earnings blowout from Nvidia late Wednesday appeared to rebuke such concerns, however, reviving enthusiasm for an AI trade that has propelled much of the market gains this year.
Investors also appeared to draw optimism from a jobs report on Thursday morning, which showed far more hiring than economists' expected. The fresh data defied a hiring slowdown that took hold over the summer.
Inflation has picked up in recent months while hiring has ratcheted down, posing a risk of an economic double-whammy known as "stagflation."
In recent months, concern has tilted toward strain in the labor market, prompting the central bank to reduce interest rates a quarter of a percentage point at each of its last two meetings.
On Thursday morning, markets appeared to digest the news as favorable toward a potential interest rate cut at the Fed's meeting next month. The odds of a quarter-point rate cut ticked up from 33% on Wednesday afternoon to 43% on Thursday morning, according to the CME FedWatch Tool, a measure of market sentiment.