Markets Gain Ground After Grim Jobs Report

Published as of: November 6, 2025, 9:16 a.m. ET

(Thursday market open) Markets rose in early trading Thursday as investors digested a private report that showed layoffs in October hit the highest rate for the month in more than two decades. The results bolstered the case for a Federal Reserve rate cut in December despite Chairman Jerome Powell's unexpectedly hawkish tone following the Fed meeting last month. 

The report from outplacement firm Challenger, Gray & Christmas painted a grim picture of the jobs market a day after a stronger-than-expected report from ADP. Challenger reported 153,000 layoffs in October due to cost-cutting and AI. Hiring slowed to a 14-year low. Year to date, this has been the worst year for layoffs since 2020, when the labor market was decimated by COVID-19. The CME Group's FedWatch gauge rebounded 5.5 points from Wednesday to reflect 67.5% chances of a rate cut next month. And Treasury yields retreated from yesterday's sharp gains.

Major indexes bounced back Wednesday from Tuesday's AI-related selloff,but finished slightly off their midday highs. Semiconductors climbed 3% as a sector and erased much of the previous day's losses. A sharp rally in Treasury yields coincided with a slight backtrack in chances of a Federal Reserve rate cut next month. The market appeared to gain support from yesterday's arguments at the Supreme Court on President Trump's tariffs. Justices seemed skeptical of the administration's stance.

1. Stocks, yields monitor court on tariffs: If the Supreme Court strikes down some of President Trump's tariffs, it might ease associated inflation but also give the economy a boost. This likely explains why yields rose yesterday, as well as Wednesday's strength in consumer stocks like automakers, airlines, and clothing companies. Still, investors might want to stay cautious predicting what the Supreme Court might do, and the resulting impact on the economy. "Even if the court rules against the administration, it has other tools available to impose tariffs," said Michael Townsend, managing director for legal and government affairs at Schwab. "And the sector-specific tariffs on things like steel, aluminum, copper, cars, pharmaceuticals, furniture and other products—those aren't part of this case. They went through a specific process that is not being challenged, so they will stay in place no matter what the court decides." The court's decision has no timetable, but some court watchers have said a decision could come as soon as early December, Townsend added.
    
2. Holiday spending in view as retailers prep: Big-box retailers are one contingent yet to report earnings, but they line up the week after next before Nvidia (NVDA) basically wraps things up ahead of the holidays when it reports November 19. Speaking of holidays, investors will likely want to hear how retailers see holiday shopping shaping up as Black Friday approaches November 28. One worry is tariffs, reinforced this week when Pinterest (PINS) said advertising demand from retail clients dried up as tariffs hurt retailer margins. In general, consumer demand is holding up, but caution remains. Consumers expect to spend 3.9% less on gifts and 12% less on non-gifts in nominal terms this holiday season versus last, the Conference Board said last week in its October consumer confidence report. "Consumers also indicated that they will likely buy fewer goods if the price of imported items is inflated by tariffs," the Conference Board said. However, there's little evidence that "pull-forward" buying early this year ahead of tariffs cannibalized this quarter's holiday shopping.
    
3. Sentiment check ahead with inflation in focus: The consumer is also in focus tomorrow at 10 a.m. ET when the market eyes preliminary November consumer sentiment from the University of Michigan. Consensus is 54 for the headline reading, up slightly from 53.6 in October but still near historic lows. Inflation expectations are a key aspect after last week's consumer confidence showed a rise. Expectations could be almost all the Federal Reserve has to go on regarding inflation, as both of next week's October price reports seem unlikely to come out barring a last-minute shutdown resolution. But even if inflation expectations slide, yesterday's ADP jobs report was well above expectations, making the labor picture look better just after the Fed cut rates to address the jobs slowdown. And yesterday's ISM Services PMI^® report showed prices paid back to a new cycle high. It all leads to confusion at the Fed, which just experienced its first dissents in opposite directions at the same meeting since 2019. The Fed seems to be at a "turning point," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research (SCFR), in a recent podcast. "With unemployment rates starting to creep up from what we can see, but inflation being too high, how do you deal with that? Obviously different members have different points of view."

• Tesla (TSLA) rose less than 1% in pre-market trading ahead of its annual shareholder meeting today. The looming question is whether a majority of TSLA shareholders vote for CEO Elon Musk's $1 trillion pay package.
   
• DoorDash (DASH) plunged more than 13% as investors appeared to lose their appetites upon seeing its results. DoorDash earnings missed expectations and the company said it would spend "several hundred million dollars" on growth initiatives in 2026.
   
• Arm Holdings (ARM), a semiconductor design company, jumped more than 3% ahead of the open after earnings exceeded consensus estimates and the company issued better-than-expected guidance.
   
• Marvell (MRVL) jumped more than 7% in pre-market trading after Bloomberg reported that Japanese conglomerate SoftBank was considering a takeover of the U.S. chipmaker.
   
• Nvidia (NVDA) lost 1.75% yesterday and fell back below $200 a share. The losses came after Reuters reported that China won't allow companies to use state funds to buy AI chips made abroad. It was up more than 1% in early trading.
   
• Qualcomm (QCOM) fell nearly 1% in pre-market trading despite easily beating analysts' earnings and revenue expectations and provided guidance that exceeded the FactSet consensus. Qualcomm reported double-digit growth in major product areas, including 18% growth for the semiconductor division not including Apple (AAPL)-related revenues.
   
• Snap (SNAP) soared more than 18% higher after reporting better-than-expected quarterly revenue and announcing a $400 million deal with Perplexity AI.
   
• Alphabet (GOOGL) rose nearly 2%, in part on a CNBC report that the company plans to make its AI chip Ironwood widely available in weeks. Alphabet also received news that Google's $32 billion deal for Wiz has cleared the Department of Justice's antitrust review, The Wall Street Journal reported.
   
• E.l.f. Beauty (ELF) dropped 22% ahead of the open despite beating analysts' earnings estimates. The company missed consensus on revenue and full-year guidance was also under expectations.
   
• CarMax (KMX) tumbled more than 10% in pre-market trading after the company announced the surprise departure of its CEO, effective December 1.
   
• Airline shares, which rose yesterday on hopes for tariff relief and a possible related lift for the economy, were modestly lower this morning after the Federal Aviation Administration (FAA) announced late Wednesday it's cutting flights by 10% at 40 major airports due to the government shutdown.
   
• Bitcoin (/BTC) fell slightly in early trading after rallying back up above $100,000 on Wednesday. Shares of stocks linked to crypto, including Coinbase (COIN) and Strategy (MSTR), also fell modestly.

WashingtonWise looks at bonds, shutdown: Schwab's new WashingtonWise podcast features comments from my colleague Townsend on the shutdown and tariffs and has a special guest, Collin Martin, head of fixed income research and strategy at SCFR, who discussed the role of bonds in a diversified portfolio. Regarding the shutdown, Townsend said, "The Senate is scheduled to be in recess and out of Washington next week. If that recess gets cancelled or delayed, it's a sure sign a deal is imminent."

FSA facts: Is a Flexible Spending Account right for you? This article breaks down what these tax-advantaged accounts do and don't cover.

Sports speculation: Betting on sports may spark some of the same adrenaline as investing, but that may be where the similarities end. Here are four key differences between the two activities.

A six-month dashboard of the S&P 500 index (SPX—candlesticks) shows a few metrics investors might want to watch for clues. First, the index has remained above its 50-day moving average for 144 straight days, the third longest stretch in history. Also, just 40% of members trade above their 50-day moving average, a narrow breadth. The Relative Strength Index, a momentum indicator (bottom chart) is at 55, neither overbought nor oversold, and the ADX indicator (second chart from bottom) fell to a four-month low below 16 yesterday, indicating that the trend is weakening.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

November 7: Preliminary November University of Michigan Consumer Sentiment and expected earnings from Constellation Energy (CEG), Duke Energy (DUK), and Enbridge (ENB).
November 10: Expected earnings from Tyson Foods (TSN), CoreWeave (CRWV), and Occidental Petroleum (OXY).
November 11: Expected earnings from Beyond Meat (BYND).
November 12: Expected earnings from Circle Internet Group (CRCL) and Cisco (CSCO).
November 13: October CPI and core CPI, and expected earnings from Walt Disney (DIS), NetEase (NTES), JD.com (JD), and Applied Materials (AMAT).