Bull Market Outlook vs. Labor Market Deterioration: S&P 500 Targets Amid Rising Layoffs

This analysis is based on the Yahoo Finance Morning Brief [1] published on November 6, 2025, featuring Seaport Research Partners Managing Director Jonathan Golub’s bullish market outlook, alongside concerning employment data from Challenger, Gray & Christmas [2].

The market presents a significant divergence between equity market optimism and labor market deterioration. Jonathan Golub maintains ambitious S&P 500 targets of 7,050 for 2025 and 7,800 for 2026, suggesting continued bull market momentum [1]. However, these forecasts confront stark employment realities, with October 2025 job cuts surging to 153,074 - a 183% increase from September and the highest October total since 2003 [2].

Current market performance reflects this uncertainty, with the S&P 500 closing at 6,733.59, down 0.80% on November 6, 2025 [0]. The technology sector, crucial for growth expectations, underperformed with a -1.34% decline [0], while basic materials was the sole positive sector at +0.26% [0].

The employment data reveals structural shifts across industries:

• Technology
  : 33,281 October cuts (up from 5,639 in September), with 141,159 year-to-date cuts [2]
• Warehousing
  : 47,878 October cuts (up from 984 in September), representing a 378% year-to-date increase [2]
• Overall hiring plans
  : Down 35% from 2024, reaching the lowest year-to-date total since 2011 [2]

: The surge in layoffs, particularly in technology and warehousing, appears connected to AI-driven cost-cutting and productivity improvements [2]. This creates a paradox where technological advancement boosts corporate efficiency while simultaneously reducing employment and potentially consumer spending power.

: Golub’s target of 7,050 represents approximately 4.7% upside from current levels [0][1], requiring strong earnings growth justification despite weakening labor market fundamentals that typically precede reduced consumer spending and corporate revenue pressure.

: The technology sector’s underperformance (-1.34%) [0] contradicts bullish growth narratives, while defensive positioning in basic materials (+0.26%) [0] suggests investor caution about economic sustainability.

: The current job cut levels (1,099,500 year-to-date) represent the highest since 2020 [2], while seasonal hiring plans (372,520) are the lowest since tracking began in 2012 [2], indicating broader economic weakness.

: The combination of rising layoffs [2] and declining hiring plans [2] threatens consumer spending, which historically drives approximately 70% of U.S. economic activity.

: Elevated market valuations combined with weakening economic fundamentals increase vulnerability to corrections if earnings fail to meet optimistic projections.

: The rapid pace of AI-related job cuts could outpace productivity benefits, creating structural unemployment that impacts long-term economic growth.

: Q4 2025 earnings season will test whether corporate performance can justify current market levels and support Golub’s targets [1].

: Federal Reserve monetary policy adjustments in response to employment data could provide market support or trigger volatility.

: Monitor whether AI-driven productivity gains translate to sufficient economic growth to offset employment losses.

The market faces contradictory signals between optimistic equity forecasts and deteriorating labor market fundamentals. While Jonathan Golub maintains bullish S&P 500 targets through 2026 [1], employment data shows significant deterioration with October job cuts reaching 153,074 [2]. The technology sector’s underperformance [0] and broader market weakness suggest investor caution despite optimistic projections. The divergence between AI-driven productivity gains and employment losses creates uncertainty about sustainable economic growth paths. Decision-makers should monitor upcoming earnings reports, Federal Reserve policy responses, and the balance between technological advancement and employment impacts when assessing market sustainability.