Layoff statistics crashed U.S. stocks: Nasdaq Composite lost 1.5%

The report on employee layoffs in the U.S., presented by the consulting firm Challenger, Gray & Christmas, led to a decline in stock indices. The broad market index S&P 500 at the trading on November 6 collapsed by 1.2%, then recovered some of the losses and at the time of publication of this text traded in the minus by 0.9%. The blue-chip index Dow Jones Industrial Average fell by 0.8%, and the technology Nasdaq Composite lost 1.5% at once, and at the moment the fall was 2%.

Shares of cell phone chip maker Qualcomm fell almost 5% despite quarterly reports that exceeded Wall Street's expectations. Shares of AI chip maker Advanced Micro Devices, which had grown significantly the previous day, collapsed by 7.5%. Quotes of the developer of AI for military and civilian companies Palantir Technologies fell by 6%, cloud computing provider Oracle - by 3.5%. The cost of chipmaker Nvidia decreased by 3.6%.

According to Challenger, Gray & Christmas, the number of layoffs reported by U.S. companies in October reached 153,074 jobs, nearly triple the number reported in the same month last year. In addition, this is the highest October figure since 2003, when the advent of cell phones caused a similar upheaval in the labor market, said the top manager of the consulting company Andy Challenger. The authors of the report explained this figure by the growth of automation, including AI, and the desire of businesses to optimize costs. The largest number of layoffs is in the technology and logistics sectors.

After the publication of these data, the probability of a rate cut by the U.S. Federal Reserve at the end of the December meeting is estimated at 60%, Bloomberg reports.

"We remain of the view that the Fed will go for another 25 basis point rate cut in December as the regulator's tight policy could exacerbate an already fragile labor market," Elias Haddad of Brown Brothers Harriman & Co. told Bloomberg.

Don Rissmiller of Strategas noted that the labor market isn't collapsing, but it doesn't look sustainable either. "While some Fed committee members aren't yet ready to commit to another rate cut at the December meeting, the shaken labor market will likely force them to do so," he said.

This article was AI-translated and verified by a human editor