Stocks Rebound To Session Highs After Soaring Corporate Layoffs Raise Rate Cut Odds
US equity futures are higher, rebounding from session lows for the second day in a row, amid headlines that layoffs are surging due to AI which in turn is raising odds of a Dec rate cut, with JPM saying that "the market is weighing a weaker labor market and potential spending vs. evidence on the efficacy (and ROI) of AI plus productivity gains." Challenger job cuts jumped to over 150K in October, nearly triple the year-earlier period and the most in more than two decades. As of 8:00am ET, S&P futures are 0.2% higher ahead of the last major earnings day of a season that’s delivered stellar results; Nasdaq futures are also up 0.2%, with Semis catching a bid driven by MRVL (+11%, takeover chatter) and NVDA (up +1.4% after yesterday’s roll on the OpenAI govt backstop headlines). TSLA rose 0.5% ahead of a vote on granting Elon Musk a potential $1 trillion pay package. In the premarket, cyclicals look flat to Defensives, while commodity-related plays are bid. The commodity complex is higher led by Energy and Metals. Asia closed higher (Shanghai +97bps/Hang Seng +2.12%/Nikkei +1.34%) driven by strength in growth/tech/ai names, while Europe is down small (FTSE -25bps/DAX -10bps/CAC -45bps). US 10 year yield down small at 4.13% on quiet macro news as the curve bull steepens, and the USD is weaker. The macro data focus is on Challenger Job Cuts which soared to 153,074K, the highest for October since 20023, and state-level initial jobless claims. Today also brings another heavy dose of earnings (pre-open we get APD, BDX, CMI, COP, H, PENN, PH, RL, ROK, TPR…post-close we get AKAM, CE, EXPE, MCHP, SNDK, TTWO, WYNN), a handful of Fed speakers, the BOE rate decision and TSLA’s annual meeting (which includes voting on Musk’s pay package). Markets also digest the likelihood of the Supreme Court striking down Trump’s IEEPA tariffs after oral arguments yesterday (Goldman expects a ruling in Dec of Jan ’26 // GIR full take).
In premarket trading, Mag 7 stocks are mixed: Tesla (TSLA) +0.6% after the deadline for investors to vote on Elon Musk gargantuan compensation plan expired at midnight (Nvidia +1.4%, Meta +0.8%, Alphabet +0.7%, Apple -0.2%, Amazon -0.03%, Microsoft -0.1%).
- CarMax (KMX) falls 11% after the used car retailer’s board terminated the employment of CEO Bill Nash.
- Coherent (COHR) soars 18% after the semiconductor device company’s results and forecast underlined AI tailwinds.
- DoorDash (DASH) falls 11% after its forecast for fourth-quarter adjusted Ebitda fell short of the average analyst estimate at the midpoint.
- Duolingo (DUOL) is down 23% after the language-learning software company gave a weak fourth-quarter bookings forecast. Analysts note that the management’s focus on user growth weighs on the bookings outlook.
- Elf Beauty (ELF) sinks 21% after the cosmetics company’s full-year outlooks for adjusted earnings per share and net sales both missed analysts’ estimates.
- Fastly (FSLY) jumps 19% after the software company’s results and raised full-year revenue forecast showed a strong growth recovery.
- HubSpot (HUBS) falls 10% after the software company reported its third-quarter results and gave an outlook.
- LegalZoom.com (LZ) rises 27% after the legal services company gave an outlook that is seen as reinforcing positive growth trends, prompting William Blair to upgrade the stock.
- Marvell (MRVL) is up 8% as people familiar say that SoftBank Group Corp. explored a potential takeover of the US chipmaker earlier this year.
- Papa John’s (PZZA) falls 7% after the pizza company reported adjusted earnings per share for the third quarter that missed the average analyst estimate.
- Qualcomm Inc. (QCOM) falls 1.8%, becoming the latest chipmaker to deliver an upbeat forecast and still leave investors underwhelmed.
- Snap (SNAP) surges 19% after the company announced a $400 million partnership with Perplexity AI Inc. to incorporate its AI-powered search engine into Snapchat.
- Stagwell Inc. (STGW) soars 80% after announcing a partnership with Palantir.
Trading this week has been marked by a pullback in the biggest beneficiaries of the artificial-intelligence race, which have powered much of this year’s rally, before dip-buyers stepped in to offer support. Corporate America has continued to deliver robust results, with 82% of the 413 S&P 500 companies reporting this quarter beating earnings expectations, 14% have missed.
“You stay sane by trying to stay long-term,” Carmignac fund manager Obe Ejikeme told Bloomberg TV. AI “is a megatrend and will pay off over the next five to ten years, no doubt about that. But staying sane is not putting all your eggs in that basket.”
Price action divergence to results continues, even within AI-related momentum sectors. Qualcomm became the latest semiconductor firm to deliver an upbeat forecast that failed to impress investors, while ARM rose on a bullish outlook pointing to an AI chip demand surge. Meanwhile, semiconductors remain top of mind: Softbank had explored acquiring Marvell earlier in the year to combine it with ARM, in what would have represented the largest semiconductor deal in history. Open AI’s CFO suggested the market should have more ‘exuberance’ for AI’s potential, while hinting the US government could backstop AI financing.
Caution over lofty tech valuations that weighed on markets earlier in the week continued to linger. Qualcomm, the biggest maker of smartphone chips, became the latest semiconductor firm to issue an upbeat forecast that failed to impress investors, sending its shares 1.8% lower.
Treasuries rebounded after the latest Challenger job cuts jumped to over 150K in October, nearly triple the year-earlier period and the most for the month in more than two decades. YTD job cuts have exceeded 1M, the most since the pandemic. The yield on 10-year notes fell two basis points to 4.14%, while the dollar headed for its biggest drop in three weeks.
Traders will also weigh the implications of the US Supreme Court hinting it is ready to put significant limits on Trump’s far-reaching agenda, adding to uncertain sentiment. US layoffs remain a focus too, with October seeing the most job cuts in more than two decades. US shutdown impact is spreading to aviation with plans to cut flight capacity by 10% at 40 high-volume markets to alleviate pressure on air traffic controllers.
Following days of mixed signals from Fed officials and scant economic data during the longest US government shutdown in history, investors will also closely watch a slate of policymaker speeches Thursday for clues on the interest-rate outlook. The Bank of England held interest rates at 4% in a five-to-four vote that laid the groundwork for a December cut. The pound pared gains of as much as 0.4% against the dollar. Gilts rose across the curve, with the two-year yield down three basis points to 3.76%.
Traders have gradually trimmed bets on a quarter-point rate cut next month to around 50% over the past week, before the job-cuts report from outplacement firm Challenger, Gray & Christmas Inc. bumped those odds back up to 60%. Still, “the overall nudge pressure is up for yields,” wrote Padhraic Garvey and Michiel Tukker at ING. “This, of course, partly reflects the ‘driving in the fog’ metaphor for the government shutdown, but also with a dose of inflation concern and a pinch of risk-on ebullience.”
Europe's Stoxx 600 is down 0.2% with construction underperforming and miners rising. Legrand shares sank as demand for data center infrastructure started to ebb. The construction and insurance sectors are among the biggest laggards, while mining and telecom shares outperform. Here are some of the biggest movers on Thursday:
- Novo shares rise as much as 3.9% after a judge denied Pfizer’s request to temporarily block the Danish drugmaker’s $10 billion bid to acquire the obesity startup Metsera, saying the US pharmaceutical company’s objections to the deal don’t warrant a delay.
- Rheinmetall shares rise as much as 3.1% after the German defense firm maintained its guidance for the full year in a move Bernstein said could reassure investors who had expected a softer quarter.
- Sainsbury shares rise as much as 1.7% as the British retailer increased its full-year profit guidance to exceed the £1 billion set out in previous updates.
- Deutsche Post shares gain as much as 6.7% after the logistics company reported earnings well ahead of expectations, a performance analysts say was aided by its tight cost control.
- Novonesis shares jump as much as 8.2% after the Danish maker of industrial enzymes reported better-than-expected organic sales growth for the third quarter and lifted the bottom of its forecast range for the full year.
- Adecco climbs as much as 11% after third-quarter results which analysts view as “strong across the board.”
- DiaSorin falls as much as 16% after the Italian medical-diagnostics company lowered its guidance for the year and delivered third-quarter results below expectations.
- Legrand drops as much as 13% after its third-quarter missed expectations and full-year guidance was left unchanged.
- Air France-KLM shares slide as much as 14%, the steepest drop in three years. The airline group reported a miss on Ebit in the third quarter, driven by lower-than-expected unit revenue.
- HelloFresh shares fall as much as 15% after Grizzly Research published a report on the meal-kit company.
- Wise shares drop as much as 9.9%, slumping to a seven-month low, after the payments company reported a sharp drop in underlying pretax profit in the first half.
- Teleperformance drops as much as 8.6% after lowering its guidance for the full year, citing “an increasingly volatile business environment.”
- Worldline shares lost as much as 12%, erasing an earlier advance, after the digital payment company announced a share sale and provided a weak outlook for 2026.
- Maersk shares fall as much as 7.5% after the Danish shipping giant reported its latest earnings.
Earlier, Asian stocks climbed the most in over a week, as dip buyers lifted technology shares after a two-day selloff. The MSCI Asia Pacific Index rose 1.2%, its biggest advance since Oct. 27, with TSMC, Tencent and SK hynix among the key boosts to the gauge’s gain. Shares advanced in Hong Kong, Japan and South Korea. Indian stocks were steady. The rebound underscores investors’ continued confidence in the long-term potential of artificial intelligence, even as concerns over stretched valuations and market concentration linger. The risk-on sentiment was also helped by the positive mood from Wall Street as dip-buyers emerge.
In FX, the dollar is weaker following the surprise release of Challenger job data, showing the worst October for cuts since 2003. Krone is the strongest G-10 currency after Norges Bank kept rates on hold and reiterated the pace of reductions will be slow. Sterling higher, gilts slightly underperforming ahead of the Bank of England decision, also expected to be a hold.
In rates, yields are 2bp-3bp lower across the curve led by intermediates, with 5s30s spread steeper by around 1bp supported by soft job cuts data and gains for gilts after Bank of England’s 5-4 decision to hold rates at 4%, with dissenters preferring a cut. US 10-year yields near 4.12% is about 4bp lower on the day; UK counterpart had a steep 3bp drop after Bank of England rate announcement.
In commodities, gold prices rising and back above $4,000/oz. Oil prices jumping too, with Brent futures up 0.7% and about $64/barrel.
Looking to the day ahead, the main highlight will be the Bank of England’s latest policy decision. There’s also plenty of speakers, including ECB Vice President de Guindos, the ECB’s Kocher, Schnabel, Villeroy, Nagel and Lane, along with the Fed’s Williams, Barr, Hammack, Waller and Musalem. On the data side, we’ll get German industrial production and Euro Area retail sales for September. The US economic calendar — including 3Q preliminary productivity and unit labor costs, weekly jobless claims and September wholesale trade — will be empty again as US government data continue to be postponed by the govt shutdown. ConocoPhillips, DataDog, Ralph Lauren and Warner Bros Discovery are among companies expected to report results before the market opens. Conoco is expected to post its worst third-quarter profit in four years amid lower crude prices brought on by higher output globally.
Market Snapshot
- S&P 500 mini +0.2%,
- Nasdaq 100 mini 0.2%,
- Russell 2000 mini +0.1%
- Stoxx Europe 600 little changed,
- DAX little changed,
- CAC 40 -0.4%
- 10-year Treasury yield -2 basis points at 4.14%
- VIX little changed at 17.97
- Bloomberg Dollar Index -0.1% at 1223.31,
- euro +0.2% at $1.1515
- WTI crude +0.7% at $60.01/barrel
Top Overnight News
- US companies announced the most job cuts for any October in more than two decades as artificial intelligence reshapes industries and cost-cutting accelerates. Companies last month announced 153,074 job cuts, nearly triple the number during the same month last year. BBG
- 8 centrist Democrats in the Senate could be prepared to vote in favor of reopening the government, but they are receiving pushback from more progressive corners of the party. The Hill
- Senate Democrats ended their workday Tuesday agonizing over what to do about the record-setting government shutdown. Many of those same lawmakers woke up Wednesday morning ready to fight on following Tuesday’s party success. The sweeping democratic gains in this week’s election has bolstered party senators insisting democrats dig in and force Republicans to accede to their demand for an extension of key health insurance subsidies. Politico
- Trump and Hill Republicans are now in completely different places on the political impacts of this seemingly endless shutdown: Punchbowl
- Trump said regarding the US shutdown, that it was a big factor in elections, while he does not think Democrats will act soon on the shutdown, and does not think it will be sorted soon. Trump reiterated the call to kill the filibuster and reopen the government immediately.
- The US Supreme Court appeared skeptical of Donald Trump’s sweeping tariff powers, with some justices suggesting he’d overstepped his authority. Yet even if the duties are struck down, the president has other legal options, leaving companies and countries in limbo. BBG
- President Trump has recently expressed reservations to top aides about launching military action to oust Venezuelan President Nicolás Maduro, fearing that strikes might not compel the autocrat to step down. WSJ
- U.S. Transportation Secretary Sean Duffy said on Wednesday that he would order a 10% cut in flights at 40 major U.S. airports, citing air traffic control safety concerns as a government shutdown hit a record 36th day. RTRS
- China has issued dollar bonds at rates equivalent to US Treasury yields, in what bankers on the deal said was the first time Beijing’s borrowing costs has matched Washington’s. the bond offering is the latest example of countries taking advantage of being able to issue international debt cheaply, as their borrowing costs in relation to US Treasuries fall to some of the lowest levels on record. FT
- Japan’s underlying wage growth remained steady in September, keeping the BOJ on track for policy tightening. One of Japan’s largest labor union groups said it plans to push for a 6% pay bump next year. BBG
- The Bank of England held interest rates at 4% in a five-to-four vote that laid the groundwork for a December cut. The pound pared gains of as much as 0.4% against the dollar. Gilts rose across the curve, with the two-year yield down three basis points to 3.76%: BBG
- The Fed finalized new standards for grading large banks and said that the new large bank supervisory standards are substantially similar to changes proposed in July.
Trade/Tariffs
- China bought two cargoes of around 120,000 tons of US wheat for December shipment, according to traders cited by Reuters. It was also reported that the US Grains and Bioproducts Council Chairman said a US sorghum shipment was sent to China last week.
- Japanese PM Takaichi said Japan will consider specific ways for Japan and the US to advance cooperation in the development of rare earth mining in waters around Minamitori Island.
- Chinese Commerce Ministry, on semiconductor flows, says China is committed to stability and security of global chip industry; will approve relevant export license applications of qualified Chinese exporters.
A more detailed look at global markets courtesy of Newquawk
APAC stocks were higher as the region took impetus from the rebound on Wall St, where all major indices gained amid dip buying and following stronger-than-expected ADP and ISM Services data releases. ASX 200 eked mild gains amid strength in miners, but with the upside limited as the top-weighted financials sector lagged after Big Four bank NAB reported a decline in full-year profit. Nikkei 225 rebounded from the prior day's selling and briefly reclaimed the 51,000 level before paring some of its gains. Hang Seng and Shanghai Comp benefitted from the improving US-China trade ties after China’s Commerce Ministry suspended the unreliable entity list announced in April and adjusted its export control lists, while there were comments from US President Trump who reiterated that Chinese President Xi is a good friend.
Top Asian News
- Japanese PM Takaichi looks to finalise an economic stimulus package to address inflation by late November and pass a supplementary budget to fund it, with some in the government eyeing a cost of over JPY 10tln, according to Nikkei.
- Japan Innovation Party co-leader Fujita said an early BoJ rate hike may give a mixed signal to businesses, while he added it is not a time for BoJ moves that have a big impact and they will not raise taxes to fund an earlier defence budget jump.
- One of Japan's largest labour unions, UA Zensen, is reportedly planning to push for a 6% wage hike for regular workers in