The major index futures indicate a slight increase at the opening on Thursday, suggesting that stocks are set to build on the gains achieved in the previous session. Some traders may persist in seeking to acquire stocks at comparatively lower levels, despite Wednesday’s gains, as the major averages continue to be significantly below last week’s record highs. Despite ongoing apprehensions regarding a potential artificial intelligence bubble and the likelihood of a short-term correction, the prevailing momentum in the markets appears to be oriented towards the upside. Amid another relatively subdued day on the U.S. economic landscape due to the persistent government shutdown, global outplacement firm Challenger, Gray & Christmas published a report indicating a significant rise in layoff announcements for the month of October. Challenger, Gray & Christmas reported that U.S.-based employers declared 153,074 job cuts in October, reflecting an increase of 183 percent compared to the 54,064 job cuts announced in September and a rise of 175 percent from the 55,597 cuts reported in the same month last year.
“Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes,” stated Andy Challenger. He noted that those currently laid off are experiencing increased difficulty in swiftly obtaining new positions, which may contribute to a further relaxation of the labor market. Challenger, Gray & Christmas reported that employers have disclosed 1,099,500 job reductions in the first ten months of the year, representing the highest year-to-date total for job cuts since 2020. Among individual stocks, shares of Snap are soaring by 19.5 percent in pre-market trading after the social media platform announced a $500 million stock buyback and provided strong fourth quarter revenue guidance. Mobile technology company AppLovin is experiencing notable pre-market strength following the release of third quarter results that exceeded expectations. Conversely, shares of DoorDash are experiencing a decline of 10.6 percent in pre-market trading following the release of third quarter earnings that fell short of analyst expectations.
After the sell-off observed during Tuesday’s session, equities exhibited robust performance for a significant portion of the trading day on Wednesday, only to face renewed pressure as the session drew to a close. The major averages experienced a significant pullback in the final hour of trading yet succeeded in closing the day with gains. The Nasdaq advanced 151.16 points or 0.7 percent to 23,499.80, the Dow climbed 225.76 points or 0.5 percent to 47,311.00, and the S&P 500 rose 24.74 points or 0.4 percent to 6,796.29. The observed strength throughout much of the day was attributed to certain traders seeking to acquire stocks at comparatively lower levels after the significant decline on Tuesday, which was partially driven by apprehensions regarding valuations. Positive sentiment may also have been generated in reaction to some encouraging U.S. economic data, including a report from payroll processor ADP indicating that private sector employment in the U.S. rebounded by more than anticipated in the month of October.
Reports says that private sector employment increased by 42,000 jobs in October, following a downward revision of 29,000 jobs in September. Private sector employment was anticipated to increase by 25,000 jobs, in contrast to the previously reported loss of 32,000 jobs for the preceding month. The Institute for Supply Management has published a report indicating that U.S. service sector activity has resumed its expansion in October. The ISM reported that its services PMI increased to 52.4 in October, following a decline to 50.0 in September, with a figure exceeding 50 signifying expansion. The index was anticipated by economists to rise slightly to 50.8. The services PMI, following a larger than anticipated rise, attained its peak level since recording 53.5 in February. Despite the late-day pullback by the broader markets, airline stocks exhibited notable resilience, with the NYSE Arca Airline Index advancing by 5.8 percent. Considerable strength also remained visible among biotechnology stocks, as reflected by the 3.1 percent surge in the biotechnology index. On the day, computer hardware and semiconductor stocks exhibited notable strength, as evidenced by the NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index, which increased by 3.1 percent and 3.0 percent, respectively. Gold stocks exhibited robust performance in conjunction with a rise in the price of the precious metal, whereas housing and software stocks experienced a decline.