4:15pm: Dow wins the day
Stocks ended Wednesday on a positive note, with investors brushing off early jitters in tech to finish the session higher.
The Dow Jones Industrial Average climbed 408 points, or 0.9%, to 47,883, while the S&P 500 added 20 points, or 0.3%, closing at 6,850.
The Nasdaq edged up 40 points, or 0.2%, to 23,454, and the Russell 2000 jumped 47 points, or 1.9%, to 2,512.
Markets digested a surprise decline in private-sector employment, which hinted at cracks in the job market but also strengthened expectations for a Federal Reserve rate cut next week.
Tech stocks stumbled earlier in the day after Microsoft shares fell 2.5%, dragging down broader technology names. Semiconductor leaders Nvidia and Broadcom also retreated, contributing to the sector’s pullback.
Meanwhile, the US dollar extended its slide to a seventh consecutive day, putting it on pace for its longest losing streak since July 2020. The dollar index, which tracks the currency against a basket including the euro, yen, and pound, fell 0.5% to 98.85 in afternoon trading.
Investors are now eyeing next week’s Fed meeting closely, with hopes rising for a potential rate cut that could support riskier assets.
3:45pm: Proactive news headlines
- Reconnaissance Energy Africa Ltd (TSX-V:RECO, OTCQX:RECAF) reported that its Kavango West 1X well in Namibia encountered roughly 400 metres of hydrocarbon-bearing rock, including 64 net metres of hydrocarbon pay in the Otavi reservoir.
- BioHarvest Sciences Inc. (NASDAQ:BHST) launched VINIA Blood Hydration, a new electrolyte product featuring its Piceid resveratrol ingredient, marking its entry into the $13 billion US hydration market.
- American Resources Corp (NASDAQ:AREC) secured a $5 million inventory line of credit to finance the acquisition of rare earth and critical mineral feedstocks for processing at its ReElement Technologies subsidiary.
- Royalty Management Holding Corp (NASDAQ:RMCO) will invest in SAGINT, a startup developing a blockchain platform to tokenize commodities and provide verifiable supply chain transparency.
- Digi Power X Inc (NASDAQ:DGXX, TSX-V:DGX) plans to deploy its first NVIDIA B200 GPU cluster in Alabama and roll out its ARMS 200 modular data center platform across US Tier III facilities starting in early 2026.
2:55pm: Market movers
- Wayfair Inc (NYSE:W) shares fell after Jefferies downgraded the stock to “Hold,” citing weakening web traffic, softer early holiday demand and fading consumer buying intent.
- PayPal Holdings Inc (NASDAQ:PYPL, XETRA:2PP) shares declined after its CFO warned that consumers continue to trade down, pressuring average order values and slowing branded checkout growth in the fourth quarter.
- Microsoft Corp (NASDAQ:MSFT) shares slipped following a report that the company has reduced sales expectations for its newer AI products among business customers.
- American Eagle Outfitters Inc. (NYSE:AEO) reported stronger-than-expected third-quarter results driven by Aerie’s momentum and a rebound at the core brand, prompting an increase in full-year guidance.
- Reconnaissance Energy Africa Ltd (TSX-V:RECO, OTCQX:RECAF) said drilling at its Kavango West 1X well in Namibia encountered significant hydrocarbon pay in the Otavi reservoir.
- Marvell Technology Group Ltd. (NASDAQ:MRVL) posted record third-quarter revenue and raised its outlook for data-center growth amid strong demand and an AI-focused acquisition.
- BioHarvest Sciences Inc. (NASDAQ:BHST) launched VINIA Blood Hydration, entering the US electrolyte market with a product featuring its Piceid resveratrol ingredient.
2:00pm: Microsoft Copilot adoption 'robust': analyst
Jefferies pushed back on Wednesday against a media report suggesting Microsoft is struggling to drive adoption of its new artificial intelligence products, saying its latest conversation with company executives paints a far stronger picture.
“We spoke with MSFT live this morning and believe The Information has completely missed the point,” the brokerage wrote, adding that Microsoft urged investors to “look at the scoreboard,” pointing to rapidly accelerating demand.
Jefferies highlighted that remaining performance obligations (RPO) growth jumped 14 percentage points to 51% year-on-year last quarter — or 148% including Microsoft’s $250 billion OpenAI deal — while capacity remains constrained because “AI demand > supply.” The firm also said management commentary and its own industry checks show “robust Copilot adoption.”
1:10pm: Anthropic preps for IPO
Anthropic, the artificial intelligence startup behind the Claude chatbot, is reportedly preparing for one of the largest initial public offerings (IPOs) in history, potentially as early as 2026, the Financial Times reported.
The move could give the Alphabet- and Amazon-backed firm a faster route to raise capital and boost its leverage for acquisitions as AI adoption surges and investor appetite intensifies.
According to the FT, the startup has held preliminary discussions with major investment banks about a potential listing, though talks remain informal and no underwriters have been chosen.
A private funding round could value the company at more than $300 billion, up from its previous $183 billion valuation.
12:20pm: September industrial output edges up
Industrial production in the US rose a modest 0.1% in September, as manufacturing output remained flat amid production cuts at auto plants, according to the Federal Reserve.
Analysts at Wells Fargo noted that the revisions to prior months “say more about data adjustment than they do a weaker recent trend in activity,” emphasizing that the underlying growth story remains intact.
While prior months’ industrial production figures were revised lower, manufacturing output has generally increased since earlier this year. Capacity utilization also fell slightly, which Wells Fargo analysts said could ease inflationary pressures in the near term.
Tech-sector output continues to drive growth, with computer and electronic products posting the fastest annual gains despite revisions. Revisions to other sectors, including durable goods like wood and nonmetallic metals, were largely offset by downward adjustments in nondurable goods such as apparel, petroleum, and paper.
11:50am: Microsoft has an AI problem
Microsoft Corp (NASDAQ:MSFT) shares fell 2.1% on Wednesday morning after a report suggested the company has lowered expectations for sales of its newer artificial intelligence products among business customers.
The Information reported that Microsoft has reduced growth goals for AI software, citing two salespeople in the Azure cloud unit. The division is a key focus for investors as it is central to Microsoft’s AI strategy.
However, the company has not cut quotas or targets for its sales staff, CNBC reported.
10:50am: Fragile jobs market
Comerica chief investment officer Eric Teal said the latest payrolls data highlights a fragile US labor market that requires careful policy attention amid inflation concerns.
“There is little evidence of widescale disruption in the labor market; however, early-career workers in the most AI-exposed occupations are most challenged,” Teal noted.
He added that the full effects of immigration on the construction and leisure/hospitality sectors are yet to be felt, likely putting upward pressure on wages and emphasizing the need to balance the Fed’s dual mandate moving into next year.
10:25am: Rate cuts likely
The probability of a December rate cut has surged from 30% to around 95% in just two weeks, reflecting a shift in focus from inflation to a weakening labor market, according to Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
“This morning’s ADP data confirm what a lot of the doves are saying – it’s more important to focus on a weakening labor market than to worry about inflation in the 2-3% range,” Zaccarelli noted.
He added that while a 25-basis-point cut is nearly certain at next week’s Federal Reserve meeting, the path beyond that is less clear, with potential influence from a new Fed chair and ongoing concerns about sticky inflation.
Northlight expects further rate cuts next year, but they may be more spaced out than currently forecast, prompting a cautiously bullish outlook for the start of 2026.
9:55am: Payroll suprise
US stocks opened mixed on Wednesday as investors wrestled with fresh signs of cooling demand for AI and a surprise drop in private-sector employment.
The Dow inched up 24 points, or 0.1%, to 47,499, while the S&P 500 slipped 9 points, or 0.1%, to 6,820.
The Nasdaq struggled more, down 92 points, or 0.4%, to 23,322, weighed by weakness in big tech. The Russell 2000 bucked the trend, climbing 10 points, or 0.4%, to 2,475.
Tech stocks were under pressure after a report from The Information said Microsoft is lowering its AI software sales quotas, fueling investor doubts about the strength of AI demand. Microsoft shares fell more than 2%, and semiconductor leaders Nvidia, Broadcom, and TSMC all dropped roughly 1% in early trading.
Adding to the market jitters, the ADP private payrolls report for November showed a surprise loss of 32,000 jobs, versus expectations for a modest gain, driven largely by small businesses. The data is stirring speculation ahead of next week’s Federal Reserve decision and has traders keeping a close eye on privately sourced services activity for signs of inflation, ahead of Friday’s official PCE release.
9:15am: Private payrolls shrink
US private payrolls fell by 32,000 jobs in November, according to the ADP National Employment Report, a sharp miss compared with economists’ expectations for a 20,000 increase.
The surprise drop signals potential cooling in the labor market heading into year-end and comes against a backdrop of growing investor concern about the durability of US job growth.
ADP’s report, which often foreshadows the government’s monthly employment data, contrasts with forecasts for modest hiring and may add pressure on policymakers watching for signs of weakening economic momentum.
8:15am: ‘Wait-and-see’ mode
US stock futures are pointing higher early Wednesday, with traders tiptoeing back in after Tuesday’s broad-based rally.
Dow Jones and S&P 500 futures are each up about 0.3%, while Nasdaq 100 contracts are also ahead by roughly the same amount as tech momentum carries over into the midweek session.
Bitcoin briefly stole the spotlight overnight, jumping above $93,000 to a two-week high before giving back some of those gains.
In corporate movers, retailers are once again front and centre. Dollar Tree is climbing after its latest results, while Macy’s is up in early trade following a raised outlook and its strongest quarterly sales in more than three years. American Eagle Outfitters is the standout, soaring 14% after beating sales expectations and issuing a higher full-year forecast.
Chip stocks are back in focus as well. Marvell Technology is up more than 8% after delivering an upbeat outlook for its data-center business. Okta, however, is sliding even after an earnings beat, as CEO Todd McKinnon pushed back on what he called investors’ misconceptions about AI and software demand.
The data calendar is busier than it’s been all week: ADP’s November private-sector jobs report lands at 8:15 a.m. ET, followed by import prices at 8:30, industrial production at 9:15, and the ISM services index at 10 a.m.
Still, the broader market mood remains unusually calm. Michael Brown, senior research strategist at Pepperstone, notes that many investors are essentially sitting on their hands. “It does feel as if most participants are in ‘wait and see’ mode for the time being, if they have even returned to their desks at all post-Thanksgiving,” he said, pointing to volatility that’s sitting near the bottom of its 12-month range. He adds that such tight trading conditions haven’t been seen since 2007 and 2019 — periods that preceded downturns — but hopes this time it simply reflects a market “biding its time until a fresh catalyst comes along.”
For now, though, Brown says markets are taking “the path of least resistance,” which continues to tilt higher.