Key Points
- U.S. stocks were mixed, with the Dow up slightly and the tech-heavy Nasdaq falling.
- Private payrolls unexpectedly declined in November, raising concerns about the job market.
- The weak jobs data increased investor bets that the Federal Reserve will cut interest rates in December.
- Microsoft’s stock dropped following a report that it is struggling to sell its new AI software.
U.S. stocks were mixed on Wednesday as the market digested conflicting news. Weak jobs data boosted hopes for a Federal Reserve interest rate cut, but a troubling report about Microsoft’s AI sales weighed on the tech sector.
At 10:42 AM ET, the major US stock indexes showed a mixed performance. The S&P 500 was trading at 6,837.47 USD, marking a modest +0.12% gain. In contrast, the tech-heavy Nasdaq 100 was slightly lower at 25,505.11 USD, down 0.20%. The Dow 30, meanwhile, was quoted at 47,632.12 USD.
The split came after the ADP National Employment Report showed that private companies unexpectedly cut 32,000 jobs in November. Economists had been expecting a small gain, and the surprise drop added to worries about a slowing labor market.
Paradoxically, the bad economic news was seen as a positive for the market. It strengthened the case for the Federal Reserve to cut interest rates at its meeting later this month. According to the CME FedWatch tool, traders are now betting there’s a nearly 90% chance the central bank will lower borrowing costs to support the sputtering economy.
However, a wet blanket was thrown on the tech sector. Microsoft’s stock fell after a report from The Information claimed the software giant is struggling to sell its newer, more advanced AI products. The report said Microsoft has been forced to lower internal sales goals for these “agent” products, an unusual move suggesting customers are hesitant to spend more on the new technology.
Elsewhere, there was some positive AI news. Chipmaker Marvell Technology saw its stock surge after confirming a $3.25 billion deal to buy semiconductor startup Celestial AI. The move will give Marvell access to new technology that uses light to connect AI chips, a key innovation for the industry.
Meanwhile, oil prices climbed as hopes for a quick peace deal in Ukraine faded, keeping the threat of supply disruptions in focus.
