Dow Jones Plunge: AI Bubble Fears & Surging Layoffs Crush DJIA - Wall Street’s Latest Reality Check
Another brutal day for traditional markets as the Dow Jones Industrial Average (DJIA) nosedives amid mounting economic headwinds. Two forces are hammering blue chips: AI hype deflation and corporate America's accelerating job cuts.
The bloodbath comes as...
• AI stocks lead declines (down 12% sector-wide)
• Q3 layoffs spike 88% YoY
• Institutional investors flee to crypto hedges
Meanwhile in digital asset markets, Bitcoin holds steady above $70K—another reminder that decentralized networks don't fire their users. Wall Street's paper-handed panic looks increasingly like a boomer asset death spiral.
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U.S. employers laid off 153,074 workers in October, up by 183% month-over-month and marking the highest level of job cuts for the month since 2003.
“This is the highest total for October in over 20 years, and the highest total for a single month in the fourth quarter since 2008. Like in 2003, a disruptive technology is changing the landscape,” said Challenger, Gray & Christmas chief revenue officer Andy Challenger. Employers cited cost-cutting, AI, and economic conditions as reasons behind the elevated reductions.
Job hiring also faces challenges, with 488,077 planned hires year-to-date as of October. That marks the lowest number since 2011 amid a persistent low-hiring, low-firing trend.
Rate cut odds pushed higher following the update, with the odds of a 25 bps reduction at the December Federal Open Market Committee (FOMC) meeting jumping to 72.6% compared to 62% a day ago.
In other news, Treasury Secretary Scott Bessent said that he is “very optimistic” that the Supreme Court will allow President TRUMP to continue imposing tariffs using the International Emergency Economic Powers Act (IEEPA). Even if Trump loses the case, he could turn to other legal alternatives to support sweeping tariffs, such as Section 122 of the Trade Act of 1974 or Section 338 of the 1930 Tariff Act.
The Dow Jones is down by 0.97% at the time of writing.
Which Stocks are Moving the Dow Jones?
Let’s pivot to TipRanks’ Dow Jones Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Within the technology sector, Salesforce (CRM) and Nvidia (NVDA) are taking the hardest hits, while Apple (AAPL) and International Business Machines (IBM) have managed to stay in positive territory. The lone energy stock in the index, Chevron (CVX), is also in the green. The Dow Jones contains four of the Magnificent 7 stocks, with three of the four stocks in the red.
Elsewhere, three of the four consumer cyclical stocks are trading lower, with Amazon (AMZN) leading the sector lower. Merck (MRK) is leading all healthcare stocks after the company secured $700 million in experimental cancer therapy funding from Blackstone (BX) earlier this week.
DIA Stock Moves Lower with the Dow Jones
The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund designed to track the movement of the Dow Jones. As a result, DIA is falling alongside the Dow Jones today.
Wall Street believes that DIA stock has room to rise. During the past three months, analysts have issued an average DIA price target of $529.15, implying upside of 12.95% from current prices. The 32 holdings in DIA carry 31 buy ratings, one hold rating, and zero sell ratings.
