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Investing.com - U.S. stock futures point mostly higher, as downbeat private-payrolls figures bolster hopes for upcoming Federal Reserve interest rate reductions, but sentiment remains clouded over by a continued U.S. government shutdown. ChatGPT-maker OpenAI is reportedly given a valuation of $500 billion after a new secondary share sale, making it the world’s most valuable startup. Elsewhere, Challenger layoffs numbers are due to be in focus, as the government’s closure leads to the possible delay of crucial labor market data.
1. Futures inch higher
U.S. stock futures were mostly in the green on Thursday, with investors largely shrugging off an ongoing U.S. government shutdown and viewing dour private employment data as a sign of more Federal Reserve interest rate cuts this year.
By 03:14 ET (07:14 GMT), the Dow futures contract was mostly unchanged, while S&P 500 futures and Nasdaq 100 futures had climbed by 0.1% and 0.2%, respectively.
The main averages on Wall Street climbed in the prior session, bolstered by the health care sector in particular. A rally in the segment began earlier in the week when U.S. pharmaceutical giant Pfizer said it had reached a deal with President Donald Trump to lower prescription drug prices in the Medicaid program in return for tariff relief. Trump indicated that he expects more drugmakers will do the same.
Elsewhere, AES’s stock price spiked, leading the benchmark S&P 500 higher, on a media report that BlackRock-owned Global Infrastructure Partners was closing in on a $38-billion deal to purchase the utility firm.
Shares of Lithium Americas Corp also gained after the U.S. Department of Energy announced a 5% stake in the materials company a 5% stake in its joint venture with General Motors.
2. OpenAI’s $500 billion valuation
OpenAI was valued at $500 billion after a secondary share sale worth about $6.6 billion, according to various news reports citing sources familiar with the matter.
The deal makes the ChatGPT-maker the world’s most valuable startup, surpassing Elon Musk’s rocket firm SpaceX, which was recently valued at about $400 billion.
Current and former employees sold stock to investors, including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price, Bloomberg News reported. It added that OpenAI was previously valued at $300 billion following a $40 billion funding round led by Japan’s SoftBank Group.
Secondary sales are commonly used by U.S. startups to provide liquidity to employees and retain talent. The sale fell short of the $10 billion-plus in stock OpenAI had made available, which the report said reflected staff confidence in the company’s long-term prospects.
3. Dollar battles to end losing streak after Supreme Court allows Fed’s Cook to remain in post
The U.S. dollar was oscillating between both sides of the flatline following the U.S. Supreme Court’s denial of Trump’s attempt to immediately remove Fed Governor Lisa Cook from her position.
Instead, the high court said it would review the Trump administration’s efforts to dismiss her during oral arguments scheduled to begin in January.
A number of senior former officials from the Fed and Treasury Department, as well as members of Cook’s legal team, had warned the court that allowing Trump to fire Cook while she is pursuing legal action over her role would spark a round of economic ructions and dent public confidence in the Fed.
Despite some early strength, the dollar index, which tracks the greenback against a basket of rivals currencies, retreated by 0.1% on Thursday. The world’s reserve currency has notched four straight days of losses.
"Markets weren’t deeply impacted by the firing attempt and are reacting modestly to the ruling, though it does signal stronger institutional protection for the Fed than other agencies," analysts at ING said in a note to clients.
4. Challenger data due
One key consequence of the continuing U.S. government shutdown has been the potential delay to the release of key economic indicators, including the monthly nonfarm payrolls report slated for Friday.
That means that other private figures, such as Thursday’s Challenger layoffs data, may receive more attention than usual.
Earlier this week, the ADP National Employment Report showed the largest decline in private payrolls in two-and-a-half years during September. One of the last officials readings -- A gauge of job openings -- increased marginally in August while hiring declined.
The Fed has been keeping close tabs on labor market numbers as officials assess the outlook for monetary policy. Borrowing costs were reduced by 25 basis points last month, with policymakers highlighting the need to prioritize supporting a flagging jobs picture over sticky inflationary pressures.
Chicago Fed President Austan Goolsbee has suggested that U.S. central bankers will now have to seek out alternative data sources before their next gathering later this month.
5. Gold hovers near all-time peaks
Gold prices hovered near record highs on Thursday as safe-haven demand remained underpinned by the U.S. government shutdown and growing conviction in more interest rate cuts.
Spot gold steadied at $3,867.97 an ounce, while gold futures for December fell 0.1% to $3,892.15/oz by 04:04 ET. The yellow metal has hit a series of peaks this week.
The U.S. government is expected to remain shut for at least three days, disrupting several federal operations across the country. Senate lawmakers also appeared to have marked little progress towards reaching consensus on a spending bill.
A prolonged shutdown could hurt the U.S. economy with disruptions in essential services. Trump’s threats of firing more federal workers also stand to further hurt the labor sector.