Stocks Slide on Signs of a Cooling Labor Market

Market Overview - The markets are currently pricing in a 69% chance of a -25 basis point rate cut at the upcoming FOMC meeting on December 9-10 [1] - US stock indexes experienced declines, with the S&P 500 down -1.12%, Dow Jones down -0.84%, and Nasdaq 100 down -1.91%, reaching two-week lows [4][5] Economic Indicators - US October Challenger job cuts surged by +175.3% year-on-year to 153,074, marking the largest increase in seven months and the highest for an October in 22 years [2] - Year-to-date job cuts have exceeded 1 million, the highest since the pandemic, with employers announcing the fewest hiring plans since 2011 [2] Corporate Earnings - The Q3 corporate earnings season is strong, with 81% of S&P 500 companies reporting earnings that beat expectations, indicating the best quarter since 2021 [3][7] - However, Q3 profits are expected to rise by only +7.2% year-on-year, the smallest increase in two years, and sales growth is projected to slow to +5.9% year-on-year from +6.4% in Q2 [7] Sector Performance - Weakness in semiconductor stocks negatively impacted the overall market, with notable declines in companies such as Advanced Micro Devices (AMD) down more than -7% and Nvidia (NVDA) down more than -3% [4][14] - Companies like Elf Beauty (ELF) and Duolingo (DUO) saw significant stock declines of more than -34% and -26% respectively, due to disappointing earnings forecasts [15][16] Interest Rates and Bond Market - The 10-year T-note yield fell -7 basis points to 4.09%, driven by expectations that the Fed will continue to cut interest rates following weak labor reports [3][9] - T-note prices received support from the ongoing US government shutdown, which is the longest in history and may lead to additional job losses and reduced consumer spending [10] International Markets - Overseas stock markets showed mixed results, with the Euro Stoxx 50 down -1.02% and China's Shanghai Composite up +0.97% [8]