During a recent Bloomberg Television appearance, senior market analyst Evelyne Gómez-Pan offered a measured take on current stock market volatility that’s catching investor attention. While acknowledging genuine macro risks, her analysis suggests the fundamental backdrop remains surprisingly resilient—even as tech stocks face pressure and correlations shift across asset classes.
The NVIDIA Earnings Effect: A Predictable Pattern
Gómez-Pan highlighted research from Bloomberg’s Mark Cudmore examining what typically happens around NVIDIA earnings releases. The pattern is revealing: “NVIDIA earnings are actually usually very good. They kind of support what we’ve seen from the rest of the tech sector in that those earnings validate your valuation,” she explained during the segment.
But here’s the counterintuitive part—despite strong results, markets often sell off in the days following the announcement. The reason? The bar has become impossibly high. Even solid earnings aren’t enough when expectations have reached stratospheric levels. What makes this particularly significant for global markets is how far the ripple effects extend beyond just tech stocks.
Spillover Effects Reach Far Beyond Technology
The cross-market impact stands out as especially noteworthy. Gómez-Pan pointed to European markets as a prime example: “Euro Stoxx is only 13% tech, but I would expect to see a feed through to the euro stocks as well.” This demonstrates how deeply interconnected global equity markets have become, with tech earnings acting as a bellwether far beyond their direct sector exposure.
The analyst broke down sector vulnerability: tech and industrials face higher susceptibility to tech-driven selloffs, while defensive plays like utilities might outperform during these periods. For investors, this creates clear portfolio positioning opportunities based on risk tolerance.
The Cryptocurrency Correlation Question
When addressing Bitcoin‘s recent drawdown alongside Nasdaq moves, Gómez-Pan offered candid perspective on crypto correlations. She acknowledged the natural link: “You have things like retail flows that go into both. People are looking at the markets and naturally linking them.”
However, she expressed fundamental concerns about cryptocurrency valuations: “I worry about assets that you can’t value. There’s not a way to say this looks reasonable or not.” Her expectation? As crypto experiences its characteristic large volatility swings, the translation to other markets should diminish progressively. The correlation exists but may prove less durable than current price action suggests.
Why This Isn’t 2000: The Sentiment Difference
What’s particularly striking about Gómez-Pan’s analysis is her contrarian comfort with current market anxiety. Looking at sentiment indicators like the AAII Bull-Bear reading, she noted: “People are more bearish than not. And typically what you see when a bubble pops is that you get this irrational exuberance.”
This represents a critical distinction from historical market tops. The absence of euphoria—replaced instead by widespread nervousness—actually serves as a constructive sign. When everyone’s worried, there’s less fuel for a true panic collapse.
Valuations Don’t Cause Selloffs—Catalysts Do
Here’s where Gómez-Pan’s framework becomes actionable for investors: “Valuations are not a catalyst. Yes, you can be nervous because of valuations, but it’s not a reason for a selloff.”
The fundamental backdrop matters more. She identified three negatives from early October that triggered the previous wobble: potential US government shutdown concerns, deteriorating China-US trade dynamics, and fears of a more hawkish Federal Reserve. The current environment? None of those factors have worsened. Trade tensions have eased with a truce, Washington remains operational, and the Fed’s terminal rate still sits around 3%—representing continued monetary easing that typically supports equity valuations.
The Volatility Reality: Chaos in the Data Stream
Gómez-Pan acknowledged genuine sources of near-term choppiness. The recent jobless claims release at approximately 4 a.m. Eastern time exemplifies the chaotic data schedule creating artificial volatility. Investors face legitimate challenges navigating unusual release patterns and parsing conflicting signals.
Her bottom line? “You’re likely to see wobbles along the way” given this environment. But wobbles differ fundamentally from collapse. The distinction matters enormously for positioning.
What Investors Should Watch Next
The key question going forward centers on whether any of those three major negative catalysts from October resurface. As long as US-China trade relations remain stable, government function continues normally, and Fed policy maintains its moderately dovish stance, the fundamental support structure stays intact.
Markets can absolutely experience sharp pullbacks and sector rotations—particularly around high-profile tech earnings—without breaking the broader bullish case. For investors, this argues for maintaining equity exposure while potentially rotating toward more defensive sectors during volatility spikes, then repositioning as conditions stabilize.
The VIX spikes we’ve witnessed may simply reflect rational repricing given valuation levels and market narrowness, rather than signaling imminent crisis. That’s a meaningful distinction for anyone managing through this environment.