U.S. Stocks May Lack Direction Following Recent Volatility

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction after moving mostly higher over the two previous sessions.

Traders may take a step back to assess the near-term outlook for the markets following the volatility seen earlier in the week.

Stocks pulled back on Monday after last week’s week rally only to regain ground during relatively choppy trading on Tuesday and Wednesday.

Optimism about another interest rate cut by the Federal Reserve next week helped the major averages more than offset Monday’s decline.

The futures remained little changed even after the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly fell to a three-year low in the week ended November 29th.

The report said initial jobless claims slid to 191,000, a decrease of 27,000 from the previous week’s revised level of 218,000.

Economist had expected jobless claims to rise to 220,000 from the 216,000 originally reported for the previous week.

With the unexpected decline, jobless claims dropped to their lowest level since hitting 189,000 in the week ended September 24, 2022.

After showing a lack of direction early in the session, stocks moved mostly higher over the course of the trading day on Wednesday. While the Nasdaq and the S&P 500 posted modest gains, the narrower Dow showed a more notable move to the upside.

The major averages all finished the day in positive territory. The Dow jumped 408.44 points or 0.9 percent to 47,882.90, the Nasdaq rose 40.42 points or 0.2 percent to 23,454.09 and the S&P 500 climbed 20.35 points or 0.3 percent to 6,849.72.

The advance by the Dow came as shares of UnitedHealth (UNH) spiked by 4.7 percent, while Goldman Sachs (GS), McDonald’s (MCD) and Amgen (AMGN) also posted strong gains.

On the other hand, shares of Microsoft (MSFT) slumped by 2.5 percent after a report from The Information said the software giant lowered growth targets for artificial intelligence software sales.

The strength in the broader markets came following the release of a report from payroll processor ADP showing an unexpected decrease by private sector employment in the month of November.

ADP said private sector employment fell by 32,000 jobs in November after climbing by an upwardly revised 47,000 jobs in October.

Economists had expected private sector employment to inch up by 10,000 jobs compared to the addition of 42,000 jobs originally reported for the previous month.

The data added to recently renewed optimism the Federal Reserve will once again lower interest rates at its monetary policy meeting next week.

CME Group’s FedWatch Tool is currently indicating an 89.0 percent chance the Fed will cut rates by another quarter point next week.

“This morning’s ADP data confirm what a lot of the doves are saying – it’s more important to focus on a weakening labor market than to worry about inflation in the 2-3% range (but still above the 2.0% target),” said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

He added, “Although there may be some dissents at next week’s Fed meeting, it is a sure thing that a 25-bps rate cut will be announced, but going forward is where things get more confusing.”

Meanwhile, a separate report from the Institute for Supply Management showing an unexpected increase by its reading on service sector activity.

The ISM said its services PMI inched up to 52.6 in November after climbing to 52.4 in October, with a reading above 50 indicating growth. Economists had expected the index to edge down to 52.1.

With the unexpected increase, the services PMI reached its highest level since hitting 53.5 in February.

Oil service stocks moved sharply higher amid a rebound by the price of crude oil, driving the Philadelphia Oil Service Index up by 3.7 percent to a ten-month closing high.

Substantial strength was also visible among airline stocks, with the NYSE Arca Airline Index surging by 2.7 percent to its best closing level in almost three months.

Steel, financial and housing stocks also saw considerable strength on the day, while computer hardware stocks showed a notable move to the downside.

Commodity, Currency Markets

Crude oil futures are advancing $0.42 to $59.37 a barrel after climbing $0.31 to $58.95 a barrel on Wednesday. Meanwhile, after rising $11.70 to $4,232.50 an ounce in the previous session, gold futures are slipping $10.80 to $4,221.70 an ounce.

On the currency front, the U.S. dollar is trading at 154.87 yen versus the 155.24 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1662 compared to yesterday’s $1.1670.

Asia

Asian stocks ended mixed on Thursday after Microsoft reportedly lowered its AI product sales targets, reviving worries over softer AI demand and margins. Investors also adopted a cautious stance before rate decisions by the Federal Reserve and the Bank of Japan in the coming days.

The dollar was under pressure as weak U.S. data fueled bets on an imminent Fed rate cut. Gold ticked lower, while oil prices rose as Russia-Ukraine tensions escalated.

China’s Shanghai Composite Index finished marginally lower at 3,875.79 after a choppy session on concerns over slowing services growth and a prolonged property slump. Hong Kong’s Hang Seng Index climbed 0.7 percent to 25,935.90.

Japanese markets surged, with chipmakers in the AI supply chain gaining ground after reports emerged that Nvidia CEO Jensen Huang met with President Trump to discuss export controls on Nvidia’s AI chips.

The Nikkei 225 Index jumped 2.3 percent to 51,028.42, extending its rally for a third straight session and reaching a three-week closing high.

The broader Topix Index settled 1.9 percent higher at 3,398.21. Tokyo Electron shot up 3.2 percent and SoftBank Group shares spiked 9.2 percent.

Seoul stocks ended a tad lower to snap a two-day winning streak. The Kospi slipped 0.2 percent to 4,028.51, with chipmakers leading losses on renewed concerns over stretched valuations in AI.

Automaker Hyundai Motor surged 6.4 percent and Kia Corp. added 1.4 percent after the U.S. confirmed a tariff cut to 15 percent on key South Korean imports such as automobiles.

Australian markets eked out modest gains as strong copper prices boosted mining stocks. Data showed household spending surged by the most in almost two years in October, lifting rate hike bets.

In addition, the goods trade surplus widened to AUD 4.39 billion in October 2025, surpassing market expectations as exports of gold climbed for a second month.

The benchmark S&P/ASX 200 Index rose 0.3 percent to 8,618.40, while the broader All Ordinaries Index closed up 0.1 percent at 8,906.70.

Across the Tasman, New Zealand’s benchmark S&P/NX-50 Index ended down 0.5 percent at 13,515.62, snapping a two-day winning streak.

Europe

European stocks are broadly higher on Thursday as weak U.S. private payrolls data fueled bets on an interest rate cut by the Federal Reserve next week.

Ukraine peace talks were also in focus despite inconclusive talks in Moscow. U.S. special envoy Steve Witkoff will meet the head of Ukraine’s national security council Rustem Umerov for talks in Miami today, the White House has confirmed.

President Trump said the talks – also attended by his son-in-law Jared Kushner – were “reasonably good,” but it was too soon to say what would happen because “it does take two to tango.”

While the German DAX Index is up by 1.0 percent, the French CAC 40 Index is up by 0.5 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.

Future Plc shares have soared in London. After a difficult 2025 marked by weaker advertising demand and a slowdown in price comparison searches, the specialist media group forecast “modest organic revenue growth” in the year to September 2026.

Finnish telecom company Nokia has also moved to the upside. The company has announced a collaboration with Bharti Airtel to open Airtel’s network to developers via Nokia’s Network as Code platform.

Skanska has also risen after the Swedish construction company signed a contract with a repeat client to build a new data center in the USA.

Meanwhile, Vodafone has fallen after its African unit signed a pact to purchase a controlling stake in Kenyan telecommunications operator Safaricom.

U.S. Economic News

The Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits unexpectedly fell to a three-year low in the week ended November 29th.

The report said initial jobless claims slid to 191,000, a decrease of 27,000 from the previous week’s revised level of 218,000.

Economist had expected jobless claims to rise to 220,000 from the 216,000 originally reported for the previous week.

With the unexpected decline, jobless claims dropped to their lowest level since hitting 189,000 in the week ended September 24, 2022.

At 10 am ET, the Commerce Department is due to release its report on new orders for manufactured goods in the month of September. Factory orders are expected to increase by 0.5 percent in September after jumping by 1.4 percent in August.

The Treasury Department is scheduled to announce the details of this month’s auctions of three-year and ten-year notes and thirty-year bonds at 11 am ET.

At 12:30 pm ET, Federal Reserve Vice Chair for Supervision Michelle Bowman is due to speak on “Bank Supervision and Regulation” at the Florida Bankers Association Leadership Luncheon.