Stocks under pressure as ADP shows surprise jobs decline

47,561.76

+87.30

+(0.18%)

As of 10:00:21 AM EST. Market Open.

^DJI ^IXIC ^GSPC

!Micron led a drop in chip stocks.

Microsoft (MSFT) helped lead a tech decline, with its shares down over 2% after The Information reported that the software giant is lowering its AI sales quotas. That appeared to reignite investor skepticism that AI demand may not be as high as projected by Big Tech. Leading semiconductor stocks retreated, with Nvidia (NVDA), Broadcom (AVGO), and TSMC (TSM) dropping nearly 1%.

Meanwhile, investors digested the ADP report, which could add fuel to the fire around an expected rate cut from the Federal Reserve next week. Private employers shed 32,000 jobs in November, compared with expectations for a modest gain. ADP said the decline was driven by a sharp pullback from small businesses.

Eyes are also on privately sourced data on services activity in November for insight into inflation last month. The next official update on consumer prices — the PCE print due Friday — is playing catch-up on September.

Elsewhere, bitcoin extended its bid to bounce back from a deep, weeks-long slump that pulled the token below $83,000 in recent days. The leading cryptocurrency rose to touch a two-week high above $93,000 on Wednesday before retracing gains somewhat.

On the earnings front, Marvell Technology (MRVL) stock climbed 7% after the US chipmaker's upbeat sales outlook and deal to buy Celestial AI. Shares of American Eagle Outfitters (AEO) surged 16% after the retailer's strong start to the holiday shopping season. But Macy's (M) shares slipped after the retailer posted a surprise profit but underwhelmed with its sales outlook amid an ongoing overhaul.

Salesforce (CRM) results are on Wednesday's earnings docket after the bell.

LIVE 13 updates

* !Laura Bratton

10 mins ago

Laura Bratton

Chip stocks sink as AI demand fears reignited by report of Microsoft AI sales quota cuts

----------------------------------------------------------------------------------------

Big name chip stocks sank in early trading after The Information reported that Microsoft (MSFT) is cutting sales quotas for some AI products.

AI chip giant Nvidia (NVDA) fell nearly 1%, while rival chipmaker Broadcom (AVGO) dropped 2.4% and leading contract chip manufacturer TSMC (TSM) sank nearly 1.9%. Micron (MU) — which supplies high-bandwidth memory to Nvidia for its AI systems — led the decline in chip stocks, falling 3.7%.

Micron led a drop in chip stocks.

The Information's report appeared to reignite investor skepticism over whether AI demand is large enough to sustain AI hardware stocks' high valuations.

* 20 mins ago

Stocks waver at the open

------------------------

US stocks wobbled at the market open on Wednesday, partly recovering from steeper declines in premarket trading.

The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) both dipped below the flat line. The tech-heavy Nasdaq Composite (^IXIC) fell around 0.3%.

Nasdaq GIDS - Free Realtime Quote • USD

NASDAQ Composite (^IXIC)

========================

23,344.53

-69.14

(-0.30%)

As of 10:00:17 AM EST. Market Open.

^IXIC ^GSPC ^DJI

The decline in tech came as a report from The Information said Microsoft (MSFT) is lowering its AI software sales quota, which appeared to fuel doubts over broader AI demand, with big name chip stocks sinking in early trading. Also pressuring stocks, the ADP jobs update that showed a surprise decline in private-sector employment in November.

The market action Wednesday comes after the major indexes finished Tuesday with gains across the board.

* !Myles Udland

43 mins ago

Myles Udland

Microsoft stock sinks after company reportedly cuts some AI sales quotas

------------------------------------------------------------------------

Microsoft (MSFT) stock fell nearly 2% in premarket trade on Wednesday after The Information reported the company had cut sales quotas for some AI products.

These full-year cuts come after some sales goals were also missed in the first half of the year.

This report sent the entire market lower, with Nasdaq futures falling as much as 0.5% before the open.

The market reaction on Wednesday shows this report being seen as another sign AI products might not yet be ready for the kind of mass customer adoption — whether that be consumers or enterprise customers — that hype around the AI trade depends on.

On the other hand, this softening of what were almost certainly aggressive targets also has a people management aspect, too, as a company doesn't want to punish a salesforce on the leading edge of an industrywide change if those same salespeople will be needed in the future to continue leading these efforts as AI products improve.

But given the state of this market, where investors have an increasing number of doubts about the stability of the AI trade against the backdrop of a slowing white collar labor market, this news does not appear to be getting the benefit of the doubt.

NasdaqGS - Nasdaq Real Time Price • USD

Microsoft Corporation (MSFT)

============================

477.05

-12.95

(-2.64%)

As of 10:00:21 AM EST. Market Open.

Macy's posts surprise Q3 profit as overhaul resonates

* Today at 1:38 PM UTC

Grace O'Donnell

ADP report shows US private employers unexpectedly shed 32,000 jobs in November

-------------------------------------------------------------------------------

US private employers shed 32,000 jobs in November, ADP reported Wednesday, marking an unexpected decline in the labor market after October's 42,000 jobs gained.

The manufacturing, professional services, information, and construction sectors led the job losses. Hiring also deteriorated in small businesses, which lost 120,000 jobs during the month.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” ADP chief economist Nela Richardson said. “And while November's slowdown was broad-based, it was led by a pullback among small businesses.”

ADP's labor market update was viewed as a crucial piece of labor market data, as the Bureau of Labor Statistics canceled its October jobs report due to the government shutdown.

Stocks were relatively unchanged following the report. Prospects of Fed interest rate cuts likely offset concerns about weakness in the labor market. On Wednesday morning, traders assigned an 88% chance that the Fed would cut rates at its December meeting, compared to 83% the previous week.

* !Jenny McCall

Today at 1:04 PM UTC

Jenny McCall

Good morning. Here's what's happening today.

--------------------------------------------

Economic data: MBA mortgage applications (week ended Nov. 28) ADP employment change (November); Import price index (September); Export price index (September) Industrial production (September); S&P Global US services PMI (November), final reading; S&P Global US composite PMI (November); ISM services index (November)

Earnings: Salesforce (CRM), Royal Bank of Canada (RY), Snowflake (SNOW), Dollar Tree (DLTR), Five Below (FIVE), Macy's (M), Uranium Energy Corp. (UEC), C3.ai (AI)

Here are some of the biggest stories you may have missed overnight and early this morning:

Bets jump on rate cuts from Trump-led Fed

Apple's leadership shift marks a 'major reset' in AI strategy

Anthropic plans an IPO as early as 2026, FT reports

Salesforce stock historically cheap as AI risk takes a toll

Bitcoin hits 2-week high in cautious crypto recovery

Women are just guessing how much they'll need to retire

Fed data suggests central bank has stopped losing money

* !Jenny McCall

Today at 12:53 PM UTC

Jenny McCall

Macy's falls as sales guidance trails last year's numbers

---------------------------------------------------------

Macy's (M) stock fell over 7% before the bell on Wednesday as its elevated sales guidance fell below last year's annual sales numbers. But the retailer posted a surprise third quarter profit and its strongest comparable sales in three years. It also raised its financial guidance for the year.

NYSE - Nasdaq Real Time Price • USD

Macy's, Inc. (M)

================

22.42

-0.28

(-1.21%)

As of 10:00:19 AM EST. Market Open.

The AP reports:

Comparable sales, a good barometer of a retailer’s health, have been an ominous sign at Macy’s for several years now, serving each quarter as a reminder that the storied department store chain had a long way to go.

On Wednesday, however, Macy’s posted a solid 3.2% increase for the quarter ended Nov. 1, following a 1.9% increase during the second quarter. The figure includes licensed businesses like cosmetics.

“As we enter the holiday season, we are well-positioned with compelling new merchandise and an omni-channel customer experience that delivers both inspiration and value,” Chairman and CEO Tony Spring said in a statement. “With a strategy rooted in hospitality, our teams are focused on driving long-term, profitable growth.”

Net sales fell slightly to $4.71 billion, from $4.73 billion, reflecting the closure of poorly performing stores. But that still outperformed projections of $4.55 billion from analysts.

* Today at 12:48 PM UTC

Grace O'Donnell

Apple's leadership shift marks a 'major reset' in AI strategy

-------------------------------------------------------------

Yahoo Finance's Hamza Shaban writes in today's Morning Brief newsletter:

OpenAI's (OPAI.PVT) Sam Altman is rallying his people to improve ChatGPT as new offerings from Google (GOOG, GOOG) and Anthropic (ANTH.PVT) up the competition. But while AI players are duking it out, scrambling for advantage, and spending like mad, there's merit in taking it all in and plotting your next move.

Not everyone can do this, of course. But Apple (AAPL) sure can.

The iPhone maker and AI laggard announced a major personnel shake-up earlier this week, signaling an inflection point in its AI strategy.

Out is its top AI leader, John Giannandrea, who presided over the company's struggles to release a cutting-edge AI product while its chief rivals and many of its consumers forged ahead.

In is Amar Subramanya, an AI exec from Microsoft, who previously spent 16 years at Google and served as the head of engineering for the Gemini assistant.

"We believe that this was a major reset while expecting more outside hires from Cook & Co. to get Apple on the right track when it comes to AI," wrote Wedbush analyst and Apple bull Dan Ives in a note on Tuesday.

* Today at 12:02 PM UTC

Karen Friar

Marvell shares jump as chipmaker bolsters AI ambitions with Celestial deal

--------------------------------------------------------------------------

Marvell Technology (MRVL) shares climbed over 10% in premarket after its quarterly earnings beat and news the US chipmaker plans to buy Celestial AI.

Reuters reports:

[Marvell's] $3.25 billion deal to acquire semiconductor startup Celestial AI deepened investor confidence in the chipmaker's push into next-gen AI ‌infrastructure.

The company is doubling down on AI infrastructure to regain momentum after a tough ‌year marked by intense competition in its custom AI chips and networking. Its shares are down about 16% so far this year.

NasdaqGS - Nasdaq Real Time Price • USD

Marvell Technology, Inc. (MRVL)

===============================

98.90

+6.01

+(6.47%)

As of 10:00:21 AM EST. Market Open.

The Celestial AI deal adds photonic tech for next-gen data centers, putting Marvell in direct competition ⁠with Broadcom (AVGO) and Nvidia (NVDA) ‌as hyperscalers race to build faster, energy-efficient systems amid the generative AI boom.

The company also issued a warrant to ‍Amazon.com (AMZN), allowing the tech giant to buy Marvell shares tied to its purchases of photonic fabric products through 2030.

"In our view, Celestial AI, with blessing from Amazon, bolsters Marvell's CPO (co-packaged optics) technology for custom XPUs and scale-up ‌switching, making Marvell a stronger contender," TD Cowen analysts said.

Read more here.

* !Jenny McCall

Today at 11:39 AM UTC

Jenny McCall

Premarket trending tickers: GitLab, Okta, and Acadia Healthcare

---------------------------------------------------------------

GitLab (GTLB) stock fell 8% before the bell on Wednesday after reporting a loss in its latest quarter despite posting double-digit sales.

NasdaqGS - Nasdaq Real Time Price • USD

GitLab Inc. (GTLB)

==================

36.38

-6.99

(-16.13%)

As of 10:00:21 AM EST. Market Open.

Okta (OKTA) stock dropped 4% during premarket trading on Wednesday. The cybersecurity company forecast fourth-quarter revenue above Wall Street estimates on Tuesday.

Acadia Healthcare (ACHC) fell 30% before the bell on Wednesday. The company lowered its full-year outlook, citing higher-than-expected costs from patient-related litigation.

* Today at 9:15 AM UTC

Karen Friar

Bitcoin hits 2-week high but crypto sentiment remains fragile

-------------------------------------------------------------

Bitcoin (BTC-USD) continued its tentative recovery on Wednesday, tapping its highest level in two weeks as cryptocurrencies more broadly look to bounce back from a weeks-long slump.

The leading token rose to about $93,965, its highest intraday level since Nov. 17. It since has pared gains to trade below $93,000.

CCC - CoinMarketCap • USD

Bitcoin USD (BTC-USD)

=====================

92,645.14

+3,562.23

+(4.00%)

As of 2:57:00 PM UTC. Market Open.

Bloomberg reports:

The digital-assets market remains on shaky ground after a bruising sell-off that began in early October, just days after bitcoin hit a record of over $126,000. Since then, more than $1 trillion in crypto market value has been wiped out.

“We don’t see a ton of buyers on the top side,” said Sean McNulty, APAC derivatives trading lead at FalconX. “Sentiment is still fragile.”

One barometer of investor confidence is the group of 12 US-listed exchange-traded funds investing in Bitcoin, which recorded what McNulty called a “feeble” $59 million inflow on Tuesday, according to data compiled by Bloomberg.

Read more here.

* Today at 8:50 AM UTC

Grace O'Donnell

American Eagle Outfitters stock jumps after CEO calls out 'record-breaking Thanksgiving weekend'

------------------------------------------------------------------------------------------------

American Eagle Outfitters (AEO) stock surged over 12% in premarket after the apparel retailer noted that its crucial holiday season was off to a strong start, boding well for the fourth quarter.

“Strong momentum has continued into the fourth quarter, including an excellent start to the holiday season," CEO Jay Schottenstein said in the release late Tuesday. "We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth at Aerie and Offline."

For the third quarter, ended Nov. 1, American Eagle reported profit per share of $0.53, surpassing estimates of $0.43 per share. Revenue for the quarter was $1.36 billion, a 6% increase year over year and slightly better than estimates.

Overall, same-store sales increased 4%, led by an 11% increase in Aerie comparable sales, while American Eagle comparable sales grew 1%.

For the fourth quarter, American Eagle expects same-store sales to grow 8% to 9% year over year. Comparable sales are expected to increase by low single digits for the full year.

NYSE - Nasdaq Real Time Price • USD

American Eagle Outfitters, Inc. (AEO)

=====================================

24.03

+3.20

+(15.39%)

As of 10:00:19 AM EST. Market Open.

* Today at 4:14 AM UTC

Rian Howlett

Silver notches new record as Fed rate, supply concerns pushes price higher

--------------------------------------------------------------------------

Bloomberg reports:

COMEX - Delayed Quote • USD

Silver Dec 25 (SI=F)

====================

58.88

+0.17

+(0.29%)

As of 9:50:22 AM EST. Market Open.

Silver (SI=F) rose to a record, as traders laid speculative bets on continued supply tightness and lower borrowing costs in the US. Gold also gained.

The white metal rose as much as 0.8% to trade at $58.9471 an ounce, above a previous peak of $58.84 set two days earlier. Investors expect that a new Federal Reserve chair and the release this month of delayed US economic data will support US President Donald Trump’s calls for monetary easing. The recent gains in precious metals reflect the potential for cuts to gather pace after Jerome Powell’s term ends in May.

Holdings by silver-backed exchange-traded funds rose by about 200 tons on Tuesday, according to Bloomberg calculations, underscoring enduring investor interest in the metal. That brought the total holdings to the highest since 2022.

* Today at 3:18 AM UTC

Rian Howlett

Anthropic opens up discussions for potential IPO in early 2026

--------------------------------------------------------------

Reuters reports:

Anthropic, the artificial intelligence startup backed by Alphabet's Google and Amazon.com, has hired the law firm Wilson Sonsini to prepare for an initial public offering that could take place as early as 2026, the Financial Times ‌reported on Tuesday.

An IPO would give the company, which operates the AI chatbot Claude, a more efficient way to ‌raise capital and provide leverage for bigger acquisitions through public stock. The move comes as AI adoption gains pace, driven by higher enterprise tech spending and growing investor appetite.

An Anthropic spokesperson told Reuters the company has not decided when or even if it will go public.

The company ⁠has previously turned to Wilson Sonsini ‌for a range of corporate matters. The law firm did not immediately respond to Reuters' request for comment on the FT report outside ‍normal business hours.

Anthropic could be prepared to list in 2026, according to the report. The startup has also discussed with major investment banks about a potential IPO, the newspaper said, citing sources.