Small Caps Hit New High on Rate-Cut Hope: Stock Market Today

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It was a choppy session for stocks Thursday as market participants weighed the latest jobs data against expectations for a rate cut at next week's Federal Reserve meeting. Still, small caps rallied hard on hopes for lower interest rates, while speculation over a Mag 7 stock's massive spending cuts kept the Nasdaq Composite above water.

Ahead of the open, data from Challenger, Gray & Christmas showed that U.S.-based employers announced 71,321 job cuts in November – up 24% year over year. While this marked a 53% drop from the number of layoffs announced in October, it's still the highest for the month since 2022.

Employers have announced 1.17 million layoffs for the year to date through November – the most since 2020. According to Challenger, Gray & Christmas, it's just the sixth time since 1993 that job cuts through November have exceeded 1.1 million.

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The Labor Department also released its weekly jobless claims update ahead of the open, with first-time filers declining 27,000 over Thanksgiving week to 191,000 – the lowest level since September 24, 2022. Continued claims rose by 56,776 to 1.8 million.

The data did little to move the needle on market expectations for a December rate cut. According to CME Group FedWatch, futures traders are currently pricing in an 87% chance that the Fed will lower the federal funds rate by a quarter-percentage point next Wednesday.

Higher odds of looser monetary policy helped small-cap stocks outperform Thursday, with the Russell 2000 climbing 0.8% to 2,531 – a new all-time closing high. The tech-heavy Nasdaq Composite (+0.2% at 23,505) and the broader S&P 500 (+0.1% at 6,857) eked out a gain, while the blue-chip Dow Jones Industrial Average (-0.07% at 47,850) closed lower.

Snowflake slumps after earnings

In single-stock news, Snowflake (SNOW) slumped 11.4% after the cloud-based data storage platform reported its fiscal 2026 third-quarter results.

While SNOW beat on the top and bottom lines, its forecast for fourth-quarter product revenue represents slower year-over-year growth than what was seen in Q3.

Wedbush analyst Daniel Ives maintained an Outperform (Buy) rating on the tech stock after earnings, saying he'd be a buyer on any weakness in the shares.

"Overall, we continue to believe that SNOW is well-positioned to be a key 2nd derivative in the AI Revolution as it will continue to benefit from the significant acceleration of use cases and a rapidly growing pipeline," Ives writes in a note to clients.

Salesforce leads Dow Jones stocks after its earnings report

Elsewhere on the earnings calendar, Salesforce (CRM) jumped 3.7% after its fiscal 2026 Q3 results, making it the best Dow Jones stock on Thursday.

While Salesforce reported higher-than-expected earnings of $3.25 per share, its revenue of $10.26 billion came up short of estimates. Still, Wall Street cheered strong guidance for its fourth quarter and full fiscal year.

"CRM delivered a very solid fiscal Q3," says Mizuho analyst Gregg Moskowitz. "Agentforce annual recurring revenue has also now eclipsed $500 million and grew an impressive 330% year over year. Additionally, customers in production with Agentforce grew 70% sequentially, and far more customers are refilling the tank after having used up their commitments."

Moskowitz anticipates a much better year for Salesforce in calendar year 2026, "with legitimate potential for re-acceleration." And following the blue chip stock's year-to-date decline of more than 25%, the analyst finds the current valuation "very compelling."

He has an Outperform rating on CRM and a $340 price target – representing implied upside of 37% to current levels – adding that Salesforce a top stock pick.

Meta soars on metaverse spending speculation

Meta Platforms (META) outperformed its fellow Magnificent 7 stocks today, rising 3.4% after a Bloomberg report suggested the Facebook parent will cut spending to its Metaverse segment by as much as 30%.

The company rebranded itself in 2021 – changing its name from Facebook to Meta Platforms – to reflect a shift toward the metaverse. However, those projects have taken a backseat to Meta's AI initiatives.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, says this reported move marks a strategic pivot rather than shrinking ambition.

"AI is the obvious beneficiary," he adds. "Unlike the Metaverse, AI is already delivering measurable improvements across Meta's core platforms, from ad targeting to user engagement, and it's central to future monetization opportunities."

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.