US stocks were mixed on Thursday as Wall Street digested fresh labor-market data and renewed hopes that the Federal Reserve will provide a December rate cut. Early gains fell as investors looked at the path ahead, leaving the major indexes hovering near the flatline.
The Dow Jones Industrial Average and S&P 500 drifted in and out of positive territory, while the Nasdaq Composite managed a small gain of about 0.1%. The mixed performance followed a slight rise in the previous session, with markets attempting to stabilize after several choppy days driven by shifting expectations around AI demand and the Fed’s next move.
Market Movers:
- American Eagle Outfitters (AEO) +15% – Shares surged after the retailer posted an 8.5% jump in Q3 sales and a 29% jump in profits, led by strength in its Aerie brand and better-than-expected holiday-season momentum. The company raised its Q4 outlook and now anticipates revenue and operating income meaningfully above previous guidance.
- Genius Sports (GENI) +11% – The stock climbed after the company unveiled long-term 2028 targets, including $1.2 billion in revenue and strong margin expansion. Management emphasized scalable infrastructure and rising adoption of its sports-data platform.
- Microchip Technology (MCHP) +7% – Shares advanced after the company lifted its fiscal Q3 outlook, projecting revenue at the high end of expectations and strong sequential trends. Executives cited healthier bookings and improving backlog into the next quarter.
- Marvell Technology (MRVL) +6% – The semiconductor firm rose after reporting upbeat results and confirming its acquisition of Celestial AI. The company projected solid full-year revenue growth above 40% and said demand trends across data-center customers continue to accelerate.
- Pure Storage (PSTG) –26% – Shares dropped even as the company raised its full-year outlook, with investors focusing instead on cautious Q4 commentary. Analysts pointed to valuation pressure and concerns about demand visibility.
- Acadia Healthcare (ACHC) –13% – The stock fell after the company cut its fiscal-year guidance due to rising professional and general liability costs, which more than doubled year over year. Management cited higher claim frequency and increased reserves.
- Microsoft (MSFT) –3% – Shares slipped after reports indicated the company is lowering AI-related sales quotas due to slower customer adoption than projected. The move sparked renewed debate over whether AI spending is growing quickly enough to justify tech-sector valuations.
- Okta (OKTA) –3% – Despite raising full-year guidance, shares pulled back as investors weighed lingering questions about enterprise IT budgets and the durability of subscription backlog strength.
Labor Market Sends Mixed Messages
Fresh data showed conflicting signals about the health of the job market. Weekly jobless claims unexpectedly fell to a three-year low at 191,000, suggesting layoffs remain contained even as economic growth cools. At the same time, a report from Challenger, Gray & Christmas showed November was the worst month for corporate layoffs since 2022, pointing to rising stress in certain sectors.
The divergence came a day after ADP reported that private-sector payrolls fell by 32,000 in November — a surprise drop that bolstered expectations for a Fed rate cut next week. While investors slightly trimmed those odds after Thursday’s releases, markets still price in an 87% probability of a 25-basis-point cut.
Tech Stocks Diverge as AI Sentiment Shifts
Tech shares traded mixed after another day of volatile headlines around AI spending. Reports that Microsoft is scaling back its AI sales quotas resurfaced concerns that enterprise demand is not growing as quickly as expectations baked into megacap stock valuations.
Meta, however, rose more than 4% on news that CEO Mark Zuckerberg plans sweeping reductions in its metaverse division. Meanwhile, several chip stocks attempted to recover after sliding earlier this week when AI-hardware demand fears briefly resurfaced. Netflix fell again amid new reports about its bid for parts of Warner Bros. Discovery, as analysts debated regulatory hurdles and long-term cost implications of a potential deal.
Rate-Cut Expectations Harden as Fed Meeting Approaches
With the Federal Reserve officially in blackout mode before its December 9–10 meeting, markets have turned fully to incoming data for clues. Traders increasingly believe policymakers will begin easing next week, a shift driven by softer employment metrics, weaker services activity, and muted inflation signals. Investors are also watching speculation surrounding Kevin Hassett as the leading candidate to replace Jerome Powell as Fed Chair. While some expect Hassett to champion lower rates, bond-market participants have reportedly expressed reservations about the potential transition.
Looking Ahead
Friday’s release of the September PCE inflation report is the final major input before the Fed’s December decision and could determine whether market conviction around a rate cut holds steady. Investors will also monitor retail and tech-sector commentary as earnings season winds down and year-end seasonality begins to take hold. Markets remain cautiously optimistic — but after a week of mixed signals, volatility may continue as Wall Street waits for clarity from the Fed.