(Updates to afternoon)

*

Indexes down: Dow 0.58%, S&P 500 0.76%, Nasdaq 1.37%

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AI-related stocks show market's tech reliance, SOX index

down

1.6%

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Challenger reports 183.1% surge in layoffs, worst October

in two

decades

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DoorDash ( DASH ) slides after quarterly revenue miss

By Stephen Culp

Nov 6 (Reuters) -

U.S. stocks turned lower on Thursday, approaching two-week

lows with a resumption of Tuesday's tech selloff as investors

contended with mounting economic uncertainty and stretched

valuations.

All three major U.S. equity indexes again slid on worries over

inflated stock prices, particularly from artificial

intelligence-related momentum shares.

The Philadelphia SE Semiconductor index dropped

1.6%.

AI-adjacent shares provided muscle to the rally in recent months

that pushed the indexes to a series of record-setting highs, so

weakness in the sector was a stark reminder of Wall Street's

reliance on tech.

"We've been through a period of very rapid gains, which

have been narrowly focused in individual securities," said

Michael Green, chief strategist at Simplify Asset Management in

Philadelphia. "We're seeing a vacillation right now between the

high-volatility stocks low-volatility 'safe' stocks."

"Those two are just like literally going back and forth for

the past couple of, you know, past couple of weeks," Green

added.

As the government shutdown persists, market participants must

contend with a dearth of economic indicators while the

data-reliant U.S. Federal Reserve is assessing the need for

further near-term interest rate cuts.

With government sources dark, alternative, private sector

sources have stepped in. On Thursday, executive outplacement

firm Challenger, Gray & Christmas reported that corporations

announced a 183.1% monthly surge in layoffs, marking the worst

October in over two decades. Cost cutting and AI-related efforts

were among the top reasons companies provided.

Separately, workforce analytics company Revelio Labs showed the

U.S. economy shed 9,100 jobs last month, with government

accounting for the bulk of the decline.

"The Challenger layoffs came in as disappointing, raising

the prospect that the labor market is weakening faster and more

than the Fed seems to be aware of," Green said. "That's led to

some repricing of the December rate cut that Powell suggested

was very much up for debate in this last speech."

On Wednesday, the U.S. Supreme Court heard arguments over

whether President Donald Trump's market-rattling tariffs

represented an overreach of presidential power.

The Dow Jones Industrial Average fell 273.71 points,

or 0.58%, to 47,037.29, the S&P 500 lost 51.43 points, or

0.76%, to 6,744.86 and the Nasdaq Composite lost 321.15

points, or 1.37%, to 23,178.65.

Among the 11 major sectors of the S&P 500, consumer

discretionary was the biggest drag, sliding 2.0%.

Energy enjoyed the largest percentage increase.

Third-quarter earnings season approached its home stretch,

with 424 companies in the S&P 500 having reported. Of those, 83%

have beaten Wall Street estimates, according to the most recent

LSEG data.

Analysts now expect year-on-year S&P 500 earnings growth of

16.8%, on aggregate, for the July-September period. That marks a

significant improvement over the 8.0% annual growth analysts

predicted at the beginning of the quarter, per LSEG.

DoorDash ( DASH ) slumped 16.0% after the delivery firm reported

third-quarter profit below Wall Street expectations on rising

expenses.

Cosmetics-maker Elf Beauty ( ELF ) forecast annual sales and

profit below expectations, and its shares tumbled 35.7%.

Snap jumped 11.7% after the social media firm beat

third-quarter revenue estimates and announced a partnership with

Perplexity AI.

Marvell Technology ( MRVL ) advanced 2.3% after Bloomberg

reported that SoftBank explored a potential takeover of the

company.

Declining issues outnumbered advancers by a 1.77-to-1 ratio

on the NYSE. There were 118 new highs and 181 new lows on the

NYSE.

On the Nasdaq, 1,367 stocks rose and 3,224 fell as declining

issues outnumbered advancers by a 2.36-to-1 ratio.

The S&P 500 posted 16 new 52-week highs and 21 new lows

while the Nasdaq Composite recorded 77 new highs and 216 new

lows.