U.S. markets appear set for a slightly higher open Thursday, as traders look to extend Wednesday’s rebound despite persistent concerns about high valuations and a potential AI-driven correction.
At the open, major U.S. index futures signaled modest gains, with investors continuing to bargain hunt after recent weakness pushed averages below record levels.
While overall market tone remains constructive, the economic backdrop remains murky amid the ongoing government shutdown. Still, new labor data from Challenger, Gray & Christmas hinted at potential cracks in the job market.
The firm reported that U.S. companies announced 153,074 layoffs in October, marking a dramatic increase from both the prior month and a year earlier.
“Some industries are correcting after the hiring boom of the pandemic,” noted Andy Challenger, workplace expert and CRO at the firm. “But this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes.”
“Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market,” he added.
So far this year, over 1.09 million job cuts have been announced, the most since 2020.
Stocks on the move
Shares of Snap (NYSE:SNAP) jumped nearly 20% in premarket trading following the company’s announcement of a $500 million share repurchase plan and strong revenue guidance.
AppLovin (NASDAQ:APP) also traded sharply higher after a solid earnings beat, while DoorDash (NASDAQ:DASH) sank more than 10% after posting disappointing results.
Recap and economic highlights
On Wednesday, stocks staged a recovery from Tuesday’s slide, though the major averages gave back part of their gains late in the day. Still, all three benchmarks closed in the green — with tech and industrials leading.
Positive momentum was supported by fresh U.S. economic data showing improvement in both employment and services activity. ADP’s report showed 42,000 new private-sector jobs in October, beating forecasts, while ISM’s services PMI rose to 52.4, signaling steady growth.
Airlines led sector gains with a 5.8% jump, followed by strong performances in biotech, chipmakers, and computer hardware. Meanwhile, housing and software stocks lagged even as gold miners advanced in tandem with bullion prices.