I messed with my css for hours, changing the positioning and z-index of just about every element on the page. I deleted every other element from the DOM except for the one with the cursor: pointer on hover, and it STILL didn’t work.
For me, on Mac OSX El Captain V 10.11, the issue had to do with some sort of interference with Photoshop CC. Once I closed Photoshop, the cursor started working again.
Solution for me: Close and reopen Photoshop
Apparently this can happen due to many different programs including Photoshop, Sketch, DataGrip, Acrobat, Sublime Text, etc.