U.S. stock futures pointed mostly higher Thursday, as weaker-than-expected private payroll figures fueled expectations for additional Federal Reserve rate cuts, despite uncertainty from the ongoing U.S. government shutdown. ChatGPT creator OpenAI is reportedly valued at $500 billion following a secondary stock sale, making it the world’s top startup by valuation. Meanwhile, Challenger layoffs data is set to gain extra attention, as the government closure may delay key labor market releases.
Futures edge upward
By 03:14 ET, Dow futures were nearly flat, while S&P 500 and Nasdaq 100 futures were up 0.1% and 0.2%, respectively. Investors largely dismissed the ongoing U.S. shutdown, instead focusing on the weak private employment report as a potential signal for more Fed rate cuts this year.
The previous session saw Wall Street’s main indexes climb, boosted by gains in the health care sector. The rally started earlier in the week when Pfizer (NYSE:PFE) announced a deal with President Donald Trump to reduce prescription drug prices in Medicaid in exchange for tariff relief. Trump suggested other pharmaceutical companies could follow a similar path.
Shares of AES (NYSE:AES) jumped, helping lift the S&P 500, after reports that BlackRock-owned Global Infrastructure Partners is close to acquiring the utility company for $38 billion. Lithium Americas Corp (NYSE:LAC) also rose after the U.S. Department of Energy acquired a 5% stake in its joint venture with General Motors (NYSE:GM).
OpenAI hits $500 billion
OpenAI’s valuation reached $500 billion after a secondary share sale of around $6.6 billion, according to reports citing sources familiar with the transaction. The deal positions OpenAI above Elon Musk’s SpaceX, previously valued at roughly $400 billion.
Bloomberg News noted that current and former employees sold shares to investors including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. OpenAI had been valued at $300 billion following a $40 billion funding round led by Japan’s SoftBank Group. Secondary sales are a common method for U.S. startups to provide liquidity for employees and retain talent. The sale fell short of the $10 billion-plus initially offered, reflecting staff confidence in the company’s long-term prospects.
Dollar reacts to Supreme Court ruling
The U.S. dollar traded close to flat after the Supreme Court blocked Trump’s attempt to remove Fed Governor Lisa Cook immediately, instead scheduling oral arguments in January.
“Markets weren’t deeply impacted by the firing attempt and are reacting modestly to the ruling, though it does signal stronger institutional protection for the Fed than other agencies,” ING analysts noted.
Despite early gains, the dollar index, which measures the greenback against a basket of rival currencies, fell 0.1% Thursday, marking a fourth consecutive day of declines.
Challenger layoffs in focus
The ongoing government shutdown could delay key economic indicators, including Friday’s nonfarm payrolls report. As a result, private releases such as Thursday’s Challenger layoffs data are drawing extra attention.
Earlier this week, the ADP National Employment Report recorded the largest decline in private payrolls in two and a half years during September. Job openings edged up slightly in August, even as hiring declined.
The Fed has monitored labor market data closely to guide monetary policy. Borrowing costs were reduced by 25 basis points last month, with officials emphasizing support for a slowing jobs market despite persistent inflation. Chicago Fed President Austan Goolsbee suggested central bankers may need to rely on alternative data sources before their October 16-17 meeting.
Gold holds near record levels
Gold remained near historic highs Thursday as safe-haven demand was supported by the government shutdown and prospects for further rate cuts. Spot gold steadied at $3,867.97 per ounce, while December futures slipped 0.1% to $3,892.15/oz by 04:04 ET.
The U.S. government is expected to remain closed for at least three days, disrupting federal operations nationwide. Lawmakers in the Senate have shown little progress toward reaching an agreement on a spending bill. Prolonged closure could impact the economy by interrupting essential services, and Trump’s threats to terminate additional federal workers could add pressure on the labor market.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply