On Monday evening Beijing time, U.S. stocks showed mixed performance, with the Nasdaq and S&P 500 indices turning positive. Following last week's volatile trading, the market continues to focus on concerns over AI valuation bubbles, sector rotation, and shifting expectations for Federal Reserve rate cuts. AI giant Nvidia is set to release its earnings report this Wednesday, offering investors further clues on the AI sector's trajectory.

The Dow Jones Industrial Average fell by 44.31 points, or 0.09%, to 47,103.17, while the Nasdaq Composite rose by 87.57 points, or 0.38%, to 22,988.16. The S&P 500 gained 9.43 points, or 0.14%, to 6,743.54. Shares of Alphabet, Google's parent company, climbed after Warren Buffett's Berkshire Hathaway disclosed a stake in the tech giant.

Last week, the Nasdaq declined by 0.5%, dragged down by losses in Alphabet, Amazon, Broadcom, and Meta Platforms. Despite a sharp drop on Thursday, the Dow and S&P 500 managed slight weekly gains.

Tom Lee, head of research at Fundstrat, noted, "We anticipated turbulence in early November, and the market is clearly experiencing volatility now." He added, "While concerns like the government shutdown and New York mayoral election have eased, other risks remain. However, we expect this volatility to eventually give way to a rebound, with the S&P 500 potentially rising about 200 points to breach the 7,000 level."

Nvidia, a key player in the AI sector, will report earnings on Wednesday, providing insights into the AI market's direction. Meanwhile, quarterly results from retail giants Walmart and Home Depot will shed light on consumer demand.

Nvidia is seen as a litmus test for the tech rally. Since ChatGPT's launch in November 2022, its stock has surged roughly 1,000%, gaining over 40% year-to-date and becoming the first company to hit a $5 trillion market cap last month.

After last week's sharp swings—driven by fears that the rally relied too heavily on a few tech giants—the market took a breather. Concerns over AI-driven leverage and potential bubbles also intensified.

Jeff Krumpelman, Chief Investment Strategist at Mariner Wealth Advisors, advised long-term AI investors not to be deterred. He emphasized that early-stage AI adoption remains a powerful, multi-year theme, and current volatility should not be compared to the dot-com bubble. "This is a real trend—AI is still in its infancy with tangible prospects, not a repeat of 2000."

Delayed September nonfarm payrolls data will be released this week following the government shutdown. Though the report may only confirm prior private surveys showing a cooling labor market, its release is critical amid heightened uncertainty for markets and policymakers.

The U.S. government resumed funding last weekend after a record 43-day shutdown, which had limited economic visibility. Some Fed officials warned the data delay could complicate December's rate decision.

Ulrich Urbahn, Head of Multi-Asset Strategy at Berenberg, stated, "Despite the lag, September’s jobs report remains significant as it reduces uncertainty. It will clarify economic momentum and rate-cut expectations."

Divisions within the Fed have emerged, with some officials casting doubt on further easing. Traders now price in less than a 50% chance of a 25-basis-point December cut.

Last Friday, Kansas City Fed President Schmid and Dallas Fed President Logan expressed skepticism about a December cut, dampening expectations. The Fed will release October meeting minutes on Wednesday, revealing rare policy disagreements. Several voting members, including Jefferson, Waller, and Williams, are scheduled to speak later Monday.