U.S. Stocks May Move In Opposite Directions In Early Trading

The major U.S. index futures are currently pointing to a mixed open on Thursday, with the Dow poised to extend yesterday’s rally but the Nasdaq likely to give back ground.

Lingering concerns about the sustainability of the artificial intelligence trade may weigh on the tech-heavy Nasdaq in early trading.

Following Democrats’ takeover of both houses of Congress in Tuesday’s midterm elections, some traders are worried about the possibility of tighter AI regulation.

“Despite yesterday’s relief rally on Wall Street, investors remain cautious about elevated technology valuations and whether substantial AI spending can generate sufficient returns,” said Daniela Hathorn, Senior Market Analyst at Capital.com.

Meanwhile, stocks outside of the tech sector may continue to benefit from relief over President Donald Trump’s acceptance of the election results and his purported willingness to work with Democrats.

Financial giants Goldman Sachs (GS), JPMorgan Chase (JPM) and American Express (AXP) are seeing notable pre-market strength and may contribute to a continued advance by the Dow.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 62,000 jobs in October after rising by 29,000 jobs in September, while the unemployment rate is expected to hold at 4.2 percent.

Following the mixed performances seen in the two previous sessions, the major U.S. stock indexes all showed significant moves to the upside. The Dow showed a particularly strong upward move, reaching a two-month closing high.

The major averages gave back some ground going into the end of the day but remained sharply higher. The Dow surged 1,569.40 points or 3 percent to 53,356.12, the S&P 500 jumped 119.70 points or 1.6 percent to 7,688.62 and the Nasdaq shot up 364.50 points or 1.4 percent to 25,736.51.

The rally on Wall Street came amid a positive reaction to the Democrats’ decisive victory in the midterm elections on Tuesday.

Democrats are projected to win control of both the House and Senate after flipping several seats in traditionally Republican states.

President Donald Trump’s apparent willingness to accept the results and work with Democrats to address political issues may have helped offset concerns about increased regulatory scrutiny under a Democrat-controlled Congress.

Several analysts also noted that a divided government, where the White House and Congress are controlled by separate parties, is often beneficial to the markets.

“The scale of the win appeared to eliminate the worst-case scenario where President Trump disputed the outcome, thereby prolonging the sort of uncertainty that investors hate,” said AJ Bell head of financial analysis Danni Hewson.

She added, “A divided government, with Democrats controlling the Senate and House of Representatives while the Republicans occupy the White House, is the sort of gridlock scenario which historically has been positive for financial markets.

In U.S. economic news, payroll processor ADP released a report showing private sector employment in the U.S. grew by more than expected in the month of October.

The report said private sector employment climbed by 86,000 jobs in October, matching a downwardly revised increase in September.

Economists had expected private sector employment to rise by 70,000 jobs compared to the addition of 90,000 jobs originally reported for the previous month.

Meanwhile, a separate report from the Institute for Supply Management showed service sector growth saw a modest slowdown in the month of October.

The ISM said its services PMI edged down to 54.5 in October after dipping to 54.9 in September, although a reading above 50 still indicates growth. Economists had expected the index to slip to 54.7.

Gold stocks moved sharply higher along with the price of the precious metal, with the NYSE Arca Gold Bugs Index soaring by 8.8 percent.

A nosedive by the price of crude oil also contributed to substantial strength among airline stocks, as reflected by the 7.0 percent spike by the NYSE Arca Airline Index.

Housing stocks also showed a significant move to the upside, driving the Philadelphia Housing Sector Index up by 6.1 percent.

Retail, software and brokerage stocks also saw considerable strength on the day, while energy and semiconductor stocks moved sharply lower.

Commodity, Currency Markets

Crude oil futures are jumping $1.35 to $89.47 a barrel after diving $7.97 to $88.12 a barrel on Wednesday. Meanwhile, after spiking $132.60 to $4,073 an ounce in the previous session, gold futures are surging $55.20 to $4,128.20 an ounce.

On the currency front, the U.S. dollar is trading at 158.47 yen versus the 158.42 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1215 compared to yesterday’s $1.1227.

Asia

Asian stocks ended mixed on Thursday as regional chipmaking shares slumped on expectations of tighter tech oversight.

Technology stocks slumped in South Korea and Japan on concerns that a Democratic-led U.S. Congress could push for tighter regulation of AI development and data center construction, which could lead to a slowdown in capex.

Underlying sentiment remained underpinned elsewhere across Asia as global bond yields eased and Brent crude prices plummeted to $95 a barrel on hopes that the U.S.-Iran war could end soon.

Brent crude futures were up half a percent at $95.08 barrel in Asian trading after having fallen nearly 9 percent in the previous session, as Democrats’ sweeping victory in the U.S. midterm elections along with diplomatic signals from Washington and Tehran helped strip the risk premium out of crude.

Global bond yields also eased as investors mulled what a divided government will mean for the war with Iran, President Trump’s policy agenda and the AI trade.

Gold prices rose nearly 2 percent to $4,125 an ounce after witnessing the biggest jump since August on Wednesday as the dollar and Treasury yields slipped.

China’s Shanghai Composite Index edged up 0.1 percent to 3,689.91, extending its rebound for a second day after top financial regulators announced measures to inject liquidity into the market.

Hong Kong’s Hang Seng Index surged 3.7 percent to 24,796.98, led by tech giants such as Alibaba and Tencent.

Japanese markets fell sharply due to a sharp sell-off in AI and chip shares. The Nikkei 225 Index tumbled 1.8 percent to 61,077.90, while the broader Topix Index settled 1.2 percent higher at 3,940.39.

Advantest plunged 14.7 percent and Tokyo Electron declined 9.4 percent on bets that Democrats will slow the pace of data center expansion in the U.S. Automaker Toyota Motor skyrocketed 16.7 percent after raising its profit forecast.

Seoul stocks nosedived as chipmakers plummeted on concerns that tighter regulation of artificial intelligence infrastructure in the U.S. could curb investment in data centers and weaken demand for semiconductors.

The Kospi Index plummeted 5.3 percent to 5,383.80 as foreign investors extended their selling streak to a fifth session. Samsung Electronics tumbled 7.6 percent, Hanmi Semiconductor gave up 9.1 percent, SK Hynix lost 9.5 percent and Samsung Electro-Mechanics plummeted 15.3 percent.

Australian markets rallied to hit a two-month high as oil prices retreated to two-month lows on bets the U.S. midterm election result will reduce the odds of an Iran war escalation.

The benchmark S&P/ASX 200 Index surged 2.6 percent to 9,065.10, with IT, retail, real estate and healthcare stocks leading the surge. The broader All Ordinaries Index closed 2.8 percent higher at 9,205.20.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index jumped 2.2 percent to 14,090.97, marking its best single-day gain in nearly 19 months and reaching an all-time high.

Europe

European stocks have moved mostly higher on Thursday, extending gains from the previous session as retreating energy costs helped ease inflation and rate hike concerns.

Investors also remained focused on France, where nationwide strikes and protests are set to take place in several cities today over the cost of living and the deterioration of public services and education.

The U.K. central bank raised its key interest rate on Thursday, as expected, for the first time since 2023 in an attempt to cushion the future impact of the second-round effects of high energy prices and warned that more hikes would be necessary if the Middle East conflict does not resolve fast.

The Monetary Policy Committee of the Bank of England, led by Governor Andrew Bailey, raised the bank rate by 25 basis points to 4.00 percent. The decision was taken by a split-vote of 8-1 as policymaker Catherine Mann was in favor of a bigger 50 basis points hike to 4.25 percent.

While the French CAC 40 Index is up by 1.1 percent, the U.K.’s FTSE 100 Index is up by 0.8 percent and the German DAX Index is up by 0.7 percent.

Air France-KLM has skyrocketed. The airline group reported stronger-than-expected third-quarter operating profit, driven by strong demand for non-stop services to India and Asia, alongside the continued expansion of its premium offering.

ArcelorMittal, the world’s second-largest steelmaker, has also surged after its quarterly core profit topped expectations.

Meal-kit maker HelloFresh has also spiked after its third-quarter core profit beat forecasts.

Telecoms group BT Group has also shown a substantial move to the upside after reporting strong first-half 2027 results.

Drinks giant Diageo has also moved sharply higher after posting an unexpected gain in quarterly organic sales.

U.K. fashion and homewares retailer Next has also risen. The company retained its full-year profit guidance after full-price sales rose 8.1 percent in the 13 weeks to 31 October.

Meanwhile, Rheinmetall has plummeted. The German defense group cut its 2026 outlook for the second time in three months, citing delays with the Boxer armored vehicle program.

Danish transport and logistics company A.P. Moller-Maersk has also plunged after its third-quarter earnings fell short of analyst estimates.

Commerzbank has also shown a notable move to the downside as the lender lowered its outlook for lending income this year.

Deutsche Telekom has also declined. The telecom company reported a 7.5 percent increase in third-quarter 2026 revenue.

U.S. Economic News

With the release of the more closely watched monthly jobs report looming on Friday, the Labor Department released a report on Thursday showing an unexpected decline in first-time claims for U.S. unemployment benefits in the week ended October 31st.

The Labor Department said initial jobless claims fell to 189,000, a decrease of 6,000 from the previous week’s revised level of 195,000.

Economists had expected jobless claims to inch up to 196,000 from the 194,000 originally reported for the previous week.

With the unexpected dip, jobless claims matched the multi-decade low of 189,000 set in the week ended July 18th.

Labor productivity in the U.S. surged by more than expected in the third quarter of 2026, according to a report released by the Labor Department on Thursday.

The Labor Department said labor productivity spiked by 3.6 percent in the third quarter after jumping by an upwardly revised 2.1 percent in the second quarter.

Economists had expected labor productivity to grow by 3.0 percent compared to the 1.4 percent increase originally reported for the previous quarter.

Meanwhile, the report said unit labor costs fell by 0.7 percent in the third quarter after surging by an upwardly revised 1.9 percent in the second quarter.

Unit labor costs were expected to climb by 0.6 percent compared to the 1.2 percent jump originally reported for the previous quarter.

At 9:10 am ET, Richmond Federal Reserve President Thomas Barkin is scheduled to speak on the economy and participate in a moderated Q&A before the 2026 CFO Summit.

Dallas Federal Reserve President Lorie Logan is due to moderate a Q&A before the Global Perspectives with Pascal Desroches and Reginald DesRoches event at 7 pm ET.