US stocks opened mixed on Tuesday evening Beijing time, following the release of ADP employment data indicating further softening in the US labor market. After the report, Goldman Sachs projected a Fed rate cut in December, followed by two additional 25-basis-point reductions in 2026.
The Dow Jones Industrial Average rose 128.06 points, or 0.28%, to 46,576.33, while the Nasdaq Composite fell 99.86 points, or 0.44%, to 22,772.14. The S&P 500 dipped 5.34 points, or 0.08%, to 6,699.78.
Nvidia shares declined after reports suggested Meta Platforms is considering a multi-billion-dollar purchase of Alphabet's AI chips. This news boosted shares of Google's Class A stock.
On Monday, major US indices posted strong gains, with the S&P 500 rising about 1.6% and the Nasdaq surging 2.7%—its best single-day performance since May 12—as tech stocks rebounded from a challenging month. The Dow added over 200 points, gaining 0.4%.
Alphabet, Google's parent company, stood out in the previous session, closing up 6.3% at a record high. Chipmaker Broadcom soared more than 11%, becoming the S&P 500's top performer, as investors reacted to news linking the two companies through high-performance specialized chip operations.
Despite the rebound from last week's sell-off, major US indices remain on track for monthly losses. AI-driven stocks, which fueled much of this year's gains, now face valuation scrutiny as investors assess whether the year-end rally will continue or reverse.
So far in November, the S&P 500 has fallen about 2%, while the Nasdaq has dropped 3.6%. The 30-stock Dow is down 2.3% month-to-date.
Abby Yoder, US equity strategist at JPMorgan Private Bank, noted, "We've seen significant liquidation, which began in late October as market liquidity tightened." She added, "Despite technical volatility in AI and tech stocks, the AI narrative and spending outlook remain fundamentally strong, setting a solid foundation for year-end performance—though caution may prevail."
Traders continue monitoring developments that could influence the Fed's policy decisions. According to CME's FedWatch Tool, markets now price in an over 80% chance of a 25-basis-point December rate cut.
Expectations surged after New York Fed President John Williams signaled room for near-term easing last Friday. San Francisco Fed President Mary Daly echoed this stance on Monday, citing labor market concerns.
Tuesday's ADP report showed accelerating job losses in US private payrolls over the past four weeks. The payroll processor noted worsening trends, with weekly job cuts averaging 13,500 recently, compared to 2,500 in prior data.
With government shutdowns delaying official releases, alternative data sources like ADP are filling information gaps. Key reports like nonfarm payrolls won't be available until December.
Fed policymakers will convene on December 9–10 with limited traditional data but increasing calls for further easing. Goldman Sachs Chief Economist Jan Hatzius stated, "With the next jobs report due December 16 and CPI data on December 18, little stands in the way of a December 10 rate cut."
Hatzius expects alternative indicators to show renewed October job losses when data normalizes. Goldman anticipates the Fed will cut rates in December, followed by two more 25-basis-point reductions in 2026.