Volatile Markets Persist as Meta Reimagines the Metaverse

Key Points

• The S&P 500 posted a slight gain while the Nasdaq-100 dipped, with small caps outperforming as the Russell 2000 extended its recent strength.
• Reports suggest Meta may cut up to 30% of its Metaverse budget to redirect investment toward AI initiatives; shares rose more than 3% on the news.
• Initial claims fell to 191,000—well below expectations—driven by sharp declines in California and Texas and influenced by seasonal adjustment factors.

Markets finished mixed today, with the S&P 500 (SPX) edging up 0.11% while the Nasdaq-100 (NDX) closed 0.10% lower. The Russell 2000 (RUT) posted a second consecutive day of outperformance, gaining 0.76% as small caps continued to attract interest. Industrials, Information Technology, and Communication Services led the advance, while Health Care and Consumer Staples lagged.

Meta May Cut Metaverse Budget

According to reports, Meta may be planning to cut up to 30% of the Metaverse division’s budget as it reallocates resources toward AI initiatives. The reductions would primarily affect the Horizon Worlds platform, the Quest VR hardware team, and several smaller units within the group. Meta shares closed higher, rising 3.43% in the session.

Labor Market Data Continues To Reflect Mix message

Initial Jobless Claims came in well below expectations at 191,000 for the week, compared with the consensus estimate of 215,000. The report showed a significant week-over-week drop in claims from California and Texas. Seasonal adjustment factors also played a role, contributing to the surprise downside.

Key Market Events for Tomorrow

• 10:00 AM ET: Core PCE Price Index
• 10:00 AM ET: Prelim UoM Consumer Sentiment
• 10:00 AM ET: Personal Income m/m
• 10:00 AM ET: Personal Spending m/m
• 03:00 PM ET: Consumer Credit m/m

Notable Earnings for Tomorrow

• Premarket: VSCO
• Postmarket: N/A

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